Fitch rates Ocwen loan B-, notes CCC

Fitch Ratings said it assigned expected ratings of B-(EXP)/RR4 to the proposed $335 million four-year senior secured first-lien term loan due 2020 and CCC(EXP)/RR5 to the proposed $350 million six-year senior secured notes due 2022 issued by Ocwen Loan Servicing, LLC.

Ocwen Loan is the primary operating company and wholly owned subsidiary of Ocwen Financial Corp.

Fitch said the expected rating of B-(EXP)/RR4 assigned to the senior secured first-lien term loan reflects equalization of the debt with the long-term issuer default ratings assigned to Ocwen Loan and Ocwen Loan, as well as the average recovery prospects in a stressed scenario based upon available collateral coverage for the term loan. The debtholders benefit from a first-priority lien in selected unencumbered assets of Ocwen Loan and a pledge of capital stock of its guarantor subsidiaries, the agency added.

The expected rating of CCC(EXP)/RR5 assigned to the senior secured notes reflects a one-notch differential below the long-term issuer default ratings, as well as the below average recovery prospects in a stressed scenario based upon available collateral coverage for the bond, Fitch said. The bondholders benefit from a second-priority, junior interest in the same assets that secure the first-lien senior secured term loan, pursuant to an intercreditor agreement.

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