Ocwen to use 25% of sale proceeds to repay senior secured term loan

By Tali David

Minneapolis, Feb. 23 - Ocwen Financial Corp. plans to use 25% of the expected $181 million in proceeds from the sale of a portion of its servicing portfolio to Home Loan Servicing Solutions to repay part of the company's senior secured term loan.

The remaining cash will be available for future acquisitions, debt repayment or other corporate purposes under the terms of the loan.

According to a press release, Ocwen entered into an agreement on Feb. 10 to sell to HLSS the right to receive the servicing fees relating to about $16 billion of unpaid principal balance. HLSS will take over ownership and responsibility for the associated servicing advances and match funded liabilities, although Ocwen will continue to service the loans and receive a subservicing fee and ancillary income.

The sale is expected to close when HLSS completes its initial public offering.

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

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