Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Stephen Laws – Deutsche Bank
Stephen Laws – Deutsche Bank
In the press release it talks of fees totaling $70 million paid for committed lines and the termination of certain reverse repurchase agreements, can you maybe break that out between the two and is that $70 million a one-time in expenses or are the fees on the committed lines going to continue?
Larry Goldstone
The $70 million is a one-time fee. If you’ll recall from the third and fourth quarter earnings releases we had indicated that we had entered into some committed repo lines in order to ensure that we have financing over the end of the third quarter and over the fourth quarter. And those were typically four to six month repo agreements and so part of that $70 million is the expensing of the up-front commitment fee that we paid for those facilities. And I believe they were in the neighborhood of $2 billion or so.
We also had a variety of structured repo transactions which were long-term transactions where there were some interest rate features that were advantageous in certain environments and not so advantageous in others and we were required by our repo lenders to pair those off and terminate them and there was a fair market value loss associated with that. But I think the—we’ll break them out in the Q. I don’t think we know what the numbers are today.
Stephen Laws – Deutsche Bank
That’s fine, I’m just trying to get to—if I’m looking at projecting what net interest income is going forward that’s a $70 million I should not include in the expense side.
Clarence Simmons
Right, you should back that out.
Larry Goldstone
Maybe to offer one additional hint though or some guidance as you think about projecting interest expense is the warrants that we issued to the override lenders and then the contingent warrants that we may issue to the override lenders will be accounted for as ?a commitment fee? is that the right way to think about it Clarence? Or as a discount on the repo financing and so the fair value of that will need to be amortized into—as a component of interest expense as we think about interest expense going forward.
Operator
Your next question comes from the line of Paul Miller – Friedman Billings Ramsey
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