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Walter Investment to launch $1.63 billion credit facility on Wednesday
By Sara Rosenberg
New York, Dec. 3 - Walter Investment Management Corp. is scheduled to hold a bank meeting at 11 a.m. ET in New York on Wednesday to launch a $1,625,000,000 credit facility, according to a market source.
Credit Suisse Securities (USA) LLC, Morgan Stanley Senior Funding Inc., Bank of America Merrill Lynch and Barclays are the joint bookrunners on the deal and joint lead arrangers with RBS and UBS Securities LLC.
The facility consists of a $125 million five-year revolver and a $1.5 billion seven-year first-lien covenant-light term loan, the source said.
The revolver is talked at Libor plus 375 basis points with no floor.
Price talk on the term loan is Libor plus 375 bps with a 1% Libor floor and an original issue discount of 99, the source said.
Included in the term loan is 101 soft call protection for six months and amortization of 1% per annum.
The incremental allowance under the credit agreement is $200 million plus unlimited amounts subject to 3 times first-lien net leverage and 4 times net total leverage.
Mandatory prepayments will come from a 50% excess cash flow sweep with step-downs based on net total leverage and 100% of net cash on asset dispositions, subject to reinvestment rights, and debt issuances, subject to exceptions.
Commitments are due on Dec. 16, the source added.
Closing is targeted for Dec. 19.
Proceeds will be used to refinance existing bank debt, and for general corporate purposes, including additional investments or acquisitions.
Other funds for the refinancing will come from $500 million of senior unsecured notes.
Pro forma for the transaction, first-lien debt to adjusted EBITDA is 2.3 times, net first-lien debt to adjusted EBITDA is 1.9 times, total debt to adjusted EBITDA is 3.5 times, and net total debt to adjusted EBITDA is 3.1 times.
Walter is a Tampa, Fla.-based asset manager, mortgage servicer and originator.
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