Ocwen launches amended and extended term loan B at Libor plus 600 bps

By Sara Rosenberg

New York, Jan. 14 – Ocwen Financial Corp. launched on Tuesday its amended and extended senior secured term loan B due May 2022 with price talk of Libor plus 600 basis points with a 50 bps step-up at 12 months, a 1% Libor floor and an original issue discount/extension fee of 97.5/2.5%, according to a market source.

The term loan has hard call protection of 102 for 24 months and amortization of 10% per annum, the source said.

Financial covenants include a maximum first-lien loan-to-value ratio equal to 40%, a minimum unencumbered assets coverage ratio of 2x through Dec. 31, 2020 and 2.25x thereafter and minimum liquidity of $125 million.

The term loan B is currently sized at $326 million, but the company will make a minimum $103.4 million paydown of the term loan at closing, plus an additional dollar-for-dollar paydown for the amount of the term loan extended above a 90% minimum extension threshold.

With this transaction, the company is extending the term loan B maturity from December 2020, lifting pricing from Libor plus 500 bps and increasing amortization from 5% per annum.

Barclays is the agent on the deal.

Commitments are due at noon ET on Jan. 22, the source added.

Ocwen is a West Palm Beach, Fla.-based non-bank mortgage servicer and originator.

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