Ocwen looking at options for $2.2 billion loans as acquisition shelved

By Sara Rosenberg

New York, Feb. 6 - Ocwen Financial Corp. is "evaluating options" for its in-market $2.2 billion term loan deal (B1) after news came out on Thursday that an indefinite hold has been put on its previously announced acquisition of mortgage servicing rights, according to a market source.

The mortgage servicing rights were going to be bought from Wells Fargo Bank on a portfolio consisting of about 184,000 loans with a total principal balance of $39 billion.

The hold on the acquisition is at the request of the New York Department of Financial Services.

Ocwen's loan deal consists of a $1.5 billion seven-year term loan and a $700 million seven-year final maturity delayed-draw term loan.

The term debt is talked at Libor plus 287.5 basis points with a 1% Libor floor and an original issue discount of 993/4, after flexing recently from Libor plus 325 bps with a 1% Libor floor and a discount of 991/2.

The term loans have 101 soft call protection for six months and amortization of 1% per annum.

Wells Fargo Securities LLC, Barclays, J.P. Morgan Securities LLC and Bank of America Merrill Lynch are the joint lead arrangers and bookrunners on the deal, with Barclays the administrative agent.

Proceeds from the term loans were slated to be used to refinance an existing $1.3 billion senior secured term loan and to fund the now tabled acquisition.

Ocwen is an Atlanta-based financial services holding company that is engaged in the servicing and origination of mortgage loans.

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