Moody’s assigns B2 to PHH loan

Moody’s Investors Service said it assigned a B2 rating to PHH Mortgage Corp.’s proposed $200 million senior secured term loan due May 15, 2022. The outlook is negative.

Moody’s rated the senior secured term loan B2 based on PHH’s Caa1 corporate credit profile, the loan’s ranking and terms and the strength of the loan’s asset coverage. PHH is a wholly owned operating subsidiary of Ocwen Financial Corp., which in the second quarter of 2019 merged its operating subsidiary, Ocwen Loan Servicing, LLC into PHH.

As part of the proposed transaction, the loan’s maturity date will be extended to May 15, 2022 from Dec. 5, 2020. In addition, the existing term loan, issued by Ocwen Loan Servicing, LLC will be paid down from $332 million as of Sept. 30 to $200 million.

PHH’s Caa1 corporate family rating reflects the firm’s weak capital level, currently constrained profitability and challenges to building a resilient business model. Ocwen’s financial profile also reflects the challenges resulting from limited opportunities available in its core market, credit impaired residential mortgage servicing.

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