Ocwen keeps falling in secondary; Walter Investment affected; Ortho-Clinical weakens

By Sara Rosenberg

New York, Oct. 22 – Ocwen Financial Corp.’s term loan B continued its downfall in trading on Wednesday in reaction to recent allegations of backdating letters to mortgage borrowers, and, as a result of the current negativity towards the mortgage sector, Walter Investment Management Corp. saw its term loan soften.

Also in the secondary, Ortho-Clinical Diagnostics Inc.’s term loan was touch lower with the release of earnings.

Switching to the primary market, Styrolution (Styrolution Group GmbH and Styrolution US Holding LLC) raised pricing on its term loan and modified the original issue discount.

Ocwen’s term loan B weakened in the secondary on Wednesday to 93½ bid, 94½ offered from 95½ bid, 96½ offered as investors continued to react to news that the company is being investigated by the New York Department of Financial Services for backdating borrower correspondence, according to a trader.

On Tuesday, the Department of Financial Services sent a letter to Ocwen saying that potentially hundreds of thousands of letters to borrowers may have been incorrectly dated, which likely caused those borrowers great harm.

Ocwen’s response was to claim that software errors in its correspondence systems inadvertently caused improperly dated letters to be sent to some borrowers and that it plans to fully cooperate with the Department of Financial Services to address their concerns.

Early this week, prior to the backdating reports, Ocwen’s term loan had been trading in the 98½ bid, 99 offered context.

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