Ocwen amends term loan, increasing pricing, makes $50 million paydown

By Marisa Wong

Morgantown, W.Va., Oct. 19 – Ocwen Financial Corp. entered into a fourth amendment to its senior secured term loan agreement on Friday, according to an 8-K filing with the Securities and Exchange Commission.

Barclays Bank plc is the administrative agent and collateral agent.

Effective on Tuesday, the amendment will, among other things

• Increase the applicable interest rate margin by 50 basis points;

• Remove, until the fiscal quarter ending June 30, 2017, the interest coverage ratio and corporate leverage ratio financial covenants;

• Establish a process for designating foreign subsidiaries as subsidiary guarantors under the term loan;

• Increase the company’s capacity to make permitted investments under the investment covenant;

• Expand the company’s ability to exclude some assets from the collateral securing the term loan, to the extent necessary to meet regulatory minimum net worth requirements;

• Require the company to use cash proceeds from future asset sales permitted under the general asset sale basket to prepay loans;

• Provide for a fee, payable to the lenders on March 31, 2017, equal to 3% of the aggregate amount of term loans outstanding as of that date; and

• Make some conforming changes as well as adjustments to some definitions.

In connection with the amendment, on Tuesday the company will voluntarily pay down $50 million of the term loan. Following the paydown, the company will have about $476.6 million outstanding.

Based in Atlanta, Ocwen provides residential and commercial mortgage loans.

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