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OAKS > SEC Filings for OAKS > Form 8-K on 26-Feb-2014All Recent SEC Filings

Show all filings for FIVE OAKS INVESTMENT CORP.

Form 8-K for FIVE OAKS INVESTMENT CORP.


26-Feb-2014

Entry into a Material Definitive Agreement, Creation of a Direct Finan


Item 1.01. Entry into a Material Definitive Agreement

On February 25, 2014, Five Oaks Acquisition Corp. ("FOAC"), a wholly owned subsidiary of Five Oaks Investment Corp. (the "Company"), entered into that certain Master Repurchase Agreement (the "Repurchase Agreement") by and among Credit Suisse First Boston Mortgage Capital LLC ("Credit Suisse") as buyer, FOAC as seller, and the Company as guarantor, for the purpose of financing the acquisition of prime jumbo residential mortgage loans and other approved mortgage loans, in furtherance of the Company's previously announced strategy to aggregate and securitize such loans.

The Repurchase Agreement will be used by FOAC from time to time to sell certain eligible residential mortgage loans, to be acquired by FOAC from one or more originators, to Credit Suisse. The Repurchase Agreement provides for a 364-day facility term with an aggregate maximum capacity of $125,000,000 which is scheduled to mature on February 24, 2015 unless extended pursuant to its terms. The Repurchase Agreement contains margin call provisions that provide Credit Suisse with certain rights if there has been a decline in the market value of the purchased mortgage loans, such that Credit Suisse may require FOAC to transfer cash or eligible mortgage loans to eliminate any margin deficit resulting from such decline. Wells Fargo Bank N.A. will act as mortgage loan custodian.

The Company also entered into a guaranty, in favor of Credit Suisse (the "Guaranty"), pursuant to which it guaranteed FOAC's obligations under the Repurchase Agreement. The Company, as guarantor, is subject to certain financial covenants in respect of the Repurchase Agreement which are not more restrictive than the Company's most restrictive financial covenants with its other repurchase agreement counterparties.

In addition, the Repurchase Agreement contains certain events of default (subject to certain materiality thresholds and cure periods), including payment defaults, breaches of covenants and/or any representations and warranties, cross-defaults, bankruptcy or insolvency proceedings and other events of default customary for this type of transaction. The remedies for such events of default are also customary for this type of transaction and include, among others, repurchase of a purchased mortgage loan and the liquidation by Credit Suisse of the mortgage loans under the Repurchase Agreement.

The Company has outstanding master repurchase agreements with two affiliates of Credit Suisse, Alpine Securitization Corp. and Credit Suisse Securities (USA)
LLC.

The foregoing descriptions of the Repurchase Agreement and Guaranty do not purport to be complete and are qualified in their entirety by reference to the full text of the Repurchase Agreement and Guaranty, respectively, which have been filed with this Current Report on Form 8-K as Exhibits 10.1 and 10.2, respectively.



Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

See Item 1.01 above, the provisions of which are incorporated by reference into this Item 2.03.



Item 9.01 Financial Statements and Exhibits

(d) Exhibits.

  Exhibit No.   Description

  10.1          Master Repurchase Agreement, dated as of February 25, 2014, by and among
                Credit Suisse First Boston Mortgage Capital LLC as buyer, Five Oaks
                Acquisition Corp. as seller and Five Oaks Investment Corp. as guarantor.

  10.2          Guaranty, dated as of February 25, 2014, by Five Oaks Investment Corp.
                in favor of Credit Suisse First Boston Mortgage Capital LLC.

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