Company: CIMO
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001628280-25-023813
Chunk: 163

Company: CHIMERA INVESTMENT CORP
Filing Date: 2025-05-08
Form: 10-Q
Item: Item 2
Chunk 163
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 modest price growth, elevated mortgage rates and high absolute levels of home prices continued to present affordability headwinds for would be homebuyers. In 97% of U.S. counties, median-priced homes were less affordable compared to historical averages. High mortgage rates and economic uncertainties led to cautious buyer behavior. Pending home sales in February dropped 3.6% year-over-year, indicating a slowdown in market activity. 

The U.S. continued to face a significant housing shortage, estimated at 4.5 million homes. Tariffs on imported building materials may increase construction costs, adding to the already high cost of a new home. This, coupled with labor shortages and regulatory hurdles, continued to constrain new housing development so far this year. 

Q1 2025 Business Highlights

Liquidity Enhancement Activity during the 1st quarter 2025

During the first quarter of 2025, we continued to seek to optimize our liabilities through securitization, enabling us to have long-term non-MTM financing on our residential mortgage loans. During the quarter, we exited a maturing $104 million non-MTM secured facility and separately entered into a new non-MTM secured facility with a principal amount of $167 million that will mature in 18 months in January 2027. The interest rate on the new facility was 412.5 basis points lower than the maturing facility.

In addition, we extended a maturing $407 million non-MTM secured facility by an additional 24 months to February 2027. The old facility had a spread of 375 basis points over SOFR with a cap rate of 8.75%. The new facility has two separate terms: (i) an approximately $283 million financing facility with a fixed rate of 8.15%, and (ii) an approximately $136 million floating-rate facility at a rate of SOFR +425 basis points.

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As a normal discipline of our business operation, we routinely evaluate the potential economic and portfolio benefits of exercising our redemption rights with respect to our sponsored securitizations. 

We have discussed on previous earnings calls the potential to effectively alter borrowing costs and/or organically raise liquidity by tactically exercising these call rights. Through this strategy, this quarter we redeemed securities in seven outstanding CIM securitizations and sponsored two new CIM securitizations as further detailed below. The net result of these transactions enabled the company to organically generate in excess of $187 million in capital for new investments, while moderately lowering our cost of financing by