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PennyMac Financial Services enters master repurchase agreement

PennyMacFinancial Services Inc., through its indirect controlled subsidiaryPennyMac Loan ServicesLLC, has entered into a master repurchase agreement with Royal Bankof Canada.

Under the agreement, PennyMac Loan Services may sell, andlater repurchase, newly originated mortgage loans in an aggregate principalamount of up to $135 million. The agreement will be used to fund new mortgageloans originated through PennyMac Loan Services' consumer direct lendingchannel or purchased from correspondent lenders through a subsidiary ofPennyMac Mortgage InvestmentTrust and, in either case, serviced and held by PennyMac LoanServices pending sale and/or securitization.

The principal amount paid by Royal Bank of Canada for eacheligible mortgage loan is based on a percentage of the lesser of the marketvalue and the unpaid principal balance of each mortgage loan. Upon therepurchase of a mortgage loan, PennyMac Loan Services is required to repay theprincipal amount related to the loan plus accrued interest at a rate reflectingthe current market and based on the LIBOR plus a margin to the date of therepurchase.