Ocwen amends loan, allowing buybacks, eliminating cap on junior debt

By Susanna Moon

Chicago, Sept. 24 - Ocwen Loan Servicing, LLC amended its senior secured term loan on Monday with Barclays Bank plc as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

The amendments will

• Permit repurchases of all of the company's series A perpetual convertible preferred stock, which may be converted to common stock prior to repurchase, and up to $1.5 billion of common stock, in each case subject to pro forma financial covenant compliance;

• Eliminate the dollar cap on junior debt but retain the requirement for any issuance to be subject to pro forma covenant compliance;

• Include a value for whole loans, or loans held for sale, in collateral value for purposes of calculating the loan-to-value ratio and include specified deferred servicing fees and the fair value of specified mortgage servicing rights in net worth for purposes of calculating the ratio of consolidated total debt to consolidated tangible net worth; and

• Modify the quarterly covenant levels for the corporate leverage ratio, ratio of consolidated total debt to consolidated tangible net worth and loan-to-value ratio.

Ocwen is an Atlanta-based financial services holding company that services and originates mortgage loans.

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