Walter Investment Management Corp. (NYSE:WAC), the parent company of Reverse Mortgage Solutions and Security One Lending, is planning to raise or borrow more than $2 billion through credit facilities and a private note offering with intentions of buying more mortgage servicing rights, it announced on Tuesday.
Plans include entering a secured credit agreement of $1.63 billion providing for new secured credit facilities, including a $125 revolving credit facility and a $1.5 billion term loan facility. The facilities will be guaranteed by each of Walter’s current and future wholly-owned domestic subsidiaries, subject to certain exceptions.
Walter is also planning a private offering of $500 million of its senior notes, due in 2021, which will be guaranteed on an unsecured senior basis by each of the company’s current and future wholly-owned domestic subsidiaries that guarantees its obligations under Walter’s new secured credit facilities.
Borrowings under Walter’s new credit facilities along with the net proceeds from the proposed private note offering will be used to finance the acquisition of MSRs and to repay indebtedness under its existing secured credit agreement.
Walter, which acquired Reverse Mortgage Solutions in 2012 for $122 million and Security One Lending earlier this year for up to $31 million, has already purchased more than $20 billion in MSRs in an agreement with EverBank Financial Corp through its Green Tree subsidiary.
Written by Alyssa Gerace