Ocwen falls on letter backdating allegations; Styrolution leaves books open, updates coming

By Sara Rosenberg

New York, Oct. 21 – Ocwen Financial Corp.’s term loan B headed lower in the secondary market on Tuesday following news that the company received a letter from the New York Department of Financial Services regarding backdating letters to mortgage borrowers.

Meanwhile, in the primary, Styrolution (Styrolution Group GmbH and Styrolution US Holding LLC) pushed out the commitment deadline on its term loan B and is expected to come out with updated terms on the transaction shortly.

Furthermore, TransFirst Inc., Norwegian Cruise Line Holdings Ltd., Block Communications Inc., Ability Network Inc. and Emcore Photovoltaics joined this week’s calendar.

Ocwen’s term loan B dropped in trading on Tuesday to 95½ bid, 96½ offered from 98½ bid, 99 offered after it was revealed that the company is being investigated by the New York Department of Financial Services for incorrectly dated borrower correspondence, according to a trader.

The Department of Finance said in a letter that Ocwen backdated “potentially hundreds of thousands of letters to borrowers, likely causing them significant harm”

The letter went on to say that if the Department concludes that it cannot trust Ocwen’s systems and processes it will take “whatever action is necessary to ensure that borrowers are protected.”

In response, Ocwen said in a news release: “Ocwen regrets that, due to software errors in our correspondence systems, we inadvertently sent improperly dated letters to some borrowers. As always, our goal is to avoid foreclosure.”

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