Walter seeks financial restructuring, gets waivers from debtholders

By Angela McDaniels

Tacoma, Wash., Aug. 1 – Walter Investment Management Corp. entered into a restructuring support agreement on Monday with a group of senior lenders and will seek a restructuring support agreement with the holders of its 7 7/8% senior notes due 2021, according to a company news release.

The proposed financial restructuring of the company will include an extension of the credit agreement’s maturity until June 2022.

The agreement was reached with the holders of more than 50% of the loans and/or commitments outstanding under the company’s credit agreement.

The consenting lenders also waived some events of default under the credit agreement, including those arising as a result of the company’s restatement of some of its financial statements due to an error in its calculation of the valuation allowance on its deferred tax asset balances.

The consenting lenders also entered into an amendment to the credit agreement to make certain changes to the mandatory prepayment provisions and negative covenants and certain technical changes.

In addition, more than 50% of the holders of the 7 7/8% notes agreed to waive any event of default existing as a result of the restatement. These holders are not party to the restructuring support agreement.

The company intends to use good-faith efforts to negotiate over the next 30 days a restructuring support agreement with the noteholders.

“After careful consideration, we have taken a significant step to improve Walter’s financial position,” president and chief executive officer Anthony Renzi said in the news release.

“The actions we have taken, combined with the support of our existing lenders, should help us strengthen our balance sheet and position Walter for a sustainable future.”

Weil, Gotshal & Manges LLP is acting as legal counsel, Houlihan Lokey is acting as investment banking debt restructuring adviser. Alvarez & Marsal North America, LLC is acting as financial adviser.

Fort Washington, Pa.-based Walter Investment Management is a servicer and originator of mortgage loans and a servicer of reverse mortgage loans.

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