Ocwen offers new 8 3/8% second-lien notes due 2022 for 6 5/8% notes

By Susanna Moon

Chicago, Nov. 1 – Ocwen Financial Corp. said subsidiary Ocwen Loan Servicing, LLC is offering to exchange its 6 5/8% senior notes due 2019 for up to $350 million principal amount of newly issued 8 3/8% senior secured second-lien notes due 2022.

The total exchange amount consists of $950 principal amount of new second-lien notes for each $1,000 principal amount plus an early tender premium of $50 principal amount of new second-lien notes per $1,000 principal amount of notes tendered for exchange before 5 p.m. ET on Nov. 15, the early tender date.

Holders who tender their notes for exchange after the early deadline will receive $950 principal amount of new second-lien notes for each $1,000 principal amount.

The company also will pay accrued interest to but excluding the settlement date.

The exchange will remain open until 11:59 p.m. ET on Nov. 30.

Tendered notes may not be withdrawn after the early deadline.

The new notes will be jointly and severally guaranteed by Ocwen, Ocwen Mortgage Servicing, Inc., Homeward Residential Holdings, Inc., Homeward Residential, Inc. and Automotive Capital Services, Inc., all of which are wholly owned subsidiaries of Ocwen.

The new notes will be unsubordinated obligations of Ocwen Loan Servicing and the guarantors, respectively, and will be secured by a second-priority lien on all of the assets that secure the senior secured term loan. The lien on the collateral securing the new second-lien notes will be junior to the first priority lien securing the senior secured term loan.

The exchange is being made only to holders who are qualified institutional buyers under Rule 144A or non-U.S. persons under Regulation S.

Holders holding about $230 million principal amount, or about 66%, of the existing notes have agreed to tender their notes in the exchange, according to a company announcement.

D.F. King & Co., Inc. (212 269-5550, 800 431-9645, ocn@dfking.com or dfking.com/ocwen) is the information agent.

Ocwen announced on Oct. 31 that it was holding negotiations with some holders to exchange its 6 5/8% senior notes due 2019 for new 8 3/8% second-lien notes due November 2022.

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

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