Ocwen Financial hosts conference call to launch $200 million term loan

By Sara Rosenberg

New York, Dec. 1 - Ocwen Financial Corp. held a conference call on Thursday morning to launch a proposed $200 million incremental senior secured term loan due Sept. 1, 2016, according to a market source.

Barclays Capital Inc. is the arranger and bookrunner on the deal.

Pricing on the loan is the same as the existing term loan at Libor plus 550 basis points with a 1.5% Libor floor, the source said, and there is 101 soft call protection until Sept. 1, 2012.

The original issue discount on the incremental loan is being talked at 981/2, the source said. For comparison, when completed in September, the existing term loan was sold at an original issue discount of 98.

Security is a perfected first-priority interest in all unencumbered assets of the company and a pledge of the capital stock of all current and future domestic subsidiaries.

Amortization is the same as the existing term loan; it will be 2.5% per quarter on the total upsized deal.

Proceeds will be used for general corporate purposes, including financing for the purchase of Saxon Capital Holdings LLC from Morgan Stanley Mortgage Capital Holdings LLC and the acquisition of a mortgage servicing portfolio from J.P. Morgan.

Commitments are due on Dec. 8, and closing is expected on Feb. 1.

Pro forma corporate debt to run-rate adjusted EBITDA is 1.68 times, total debt to tangible equity is 4.53 times, total debt to equity is 4.33 times, and corporate interest coverage is 5.82 times.

Ocwen is an Atlanta-based provider of residential and commercial loan servicing, special servicing and asset management services.

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