Company: CIMO
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0001628280-25-006426
Chunk: 107

Company: CHIMERA INVESTMENT CORP
Filing Date: 2025-02-19
Form: 10-K
Item: Item 1A
Chunk 107
---
 2029. Net of underwriting fees, we received a total of $62 million in proceeds. These notes may be redeemed, in whole or in part, at any time at our option on or after May 15, 2026. In August 2024, we issued $75 million of 9.25% unsecured senior notes due August 15, 2029. Net of underwriting fees, we received a total of $72 million in proceeds. These notes may be redeemed, in whole or in part, at any time at our option on or after August 15, 2026.

Acquisition of Palisades Group

In December 2024, we consummated the Palisades Acquisition. Founded in 2012, Palisades manages and invests, on behalf of third parties, in residential real estate assets across a broad spectrum of credit products. Upon closing, Jack Macdowell, Jr., co-founder and Chief Investment Officer of Palisades, became our Chief Investment Officer. Under the terms of the agreement, we acquired Palisades for cash consideration of $30 million at closing, plus an additional potential earnout of up to $20 million over five years contingent upon achieving certain financial targets, with the option for us to pay 50% of the earnout payments in common shares, aligning interests with those of our shareholders. 

Secured Financing Activity during 2024

The Federal Reserve shifted its monetary policy stance, transitioning from a period of rate hikes to implementing one hundred basis points in rate cuts during 2024 in response to evolving economic conditions. Managing our floating rate liabilities through this period of uncertainty remained among the top priorities of management. Management was focused throughout the year on strengthening our portfolio’s liability structure through proactive portfolio management (selling certain assets, purchasing non-agency subordinate securities and Agency CMO floaters) and securitization, which provides long-term, fixed rate, non-recourse financing.

On a year-over-year basis, our secured financing agreements (recourse liabilities) increased by a net $392 million:

•Secured financing facilities backed by residential credit portfolio increased by $35 million.

•Secured financing backed by Agency CMO facilities increased by $403 million.

While our securitized debt (non-recourse liabilities) increased by $392 million during the third quarter as we closed on our CIM 2024-R1 securitization, our net securitized debt balance decreased by $617 million due to prepayments during the year