Moody's rates Walter Investment loans B1, B3

Moody's Investors Service said it assigned a first-time B1 corporate family rating to Walter Investment Management Corp., a B1 senior secured rating to the $500 million first-lien term loan and a B3 senior secured rating to the $265 million second-lien term loan.

The outlook is stable.

The B3 senior secured rating on the second-lien term loan reflects the debt instrument's junior position in Walter Investment's debt capital structure and the amount of otherwise unencumbered assets, the agency said.

Walter Investment's ratings reflect the combined entity's growing position in the U.S. mortgage third party servicing market as well as the company's above-average collections and loss mitigation abilities resulting from its high-touch, early-stage intervention process and its unique decentralized operating model,, the agency said.

In addition, the ratings reflect its robust pipeline and various channels for sourcing new servicing and its scalable business model to accommodate growth opportunities, the agency added.

The ratings are constrained by the company's negative tangible equity and high debt-to-EBITDA ratio, Moody's said.

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