Ocwen amends senior secured term loan covenants for more flexibility

By Marisa Wong

Morgantown, W.Va., March 24 – Ocwen Financial Corp. said it amended some covenants under its senior secured term loan.

The changes take effect March 28, according to a press release.

The key amendments include the following:

• Permanently removing the consolidated total debt to consolidated tangible net worth ratio, corporate leverage ratio and interest coverage ratio financial covenants;

• Maintaining the loan-to-value ratio covenant at its current 40% level throughout the remaining term of the loan;

• Limiting the repurchase of the company’s common stock or options to an amount not exceeding $20 million and its 6 5/8% senior notes due 2019 to an amount not exceeding $30 million. These limits may be updated if the company makes additional voluntary prepayments under the term loan;

• Requiring the company to make a prepayment in an amount equal to $6.3 million (for a total of $19 million) on each of May 31, July 29 and Sept. 30, 2016; and

• Providing for clarifications, additions and cleanup items in the collateral value calculations.

“This amendment provides us with additional flexibility under our financial covenants, while providing our lenders additional early principal payments on the [term loan] and enhanced covenants regarding our ability to repurchase our equity and unsecured debt,” Ron Faris, president and chief executive officer of Ocwen, said in the release.

Ocwen is a financial services holding company based in West Palm Beach, Fla.

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