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Nationstar to force conversion of 5% series B notes for WMIH merger
By Susanna Moon
Chicago, Feb. 13 – Nationstar Mortgage Holdings Inc. plans to force conversion of its series B 5% convertible preferred stock in connection with the planned merger with WMIH Corp.
Under the definitive merger agreement, the amount payable to Nationstar shareholders will $1.2 billion in cash and WMIH shares valued at about $702 million as well as the refinancing of $1.9 billion Nationstar notes at closing, according to a press release by the companies.
WMIH said it has secured $2.75 billion of financing commitments for the deal.
After the deal, Nationstar shareholders will own about 36% of the combined company and WMIH shareholders will own about 64%.
At closing, all outstanding WMIH series B preferred stock and warrants will be converted into common stock of WMIH.
The shares issued under the conversions are included in the pro forma ownership percentages.
Holders of WMIH’s series B 5% convertible preferred stock will receive about 444 million shares of common stock after the mandatory conversion of the series B stock at a fixed conversion price of $1.35 per share.
Holders of the series B stock will receive about 21 million shares of common stock and, upon closing, a special distribution of about 11 million common shares.
As a result, holders of the series B stock will be expected to own about 477 million shares, or 43%, of the combined company.
The deal has been unanimously approved by the boards of directors of both companies and requires shareholder approval by both companies, the release added.
WMIH is based in Seattle. On March 19, 2012, WMIH emerged from bankruptcy as the successor to Washington Mutual, Inc. with limited operations other than a legacy reinsurance business, which is being operated in runoff mode with no new business since Sept. 26, 2008.
Nationstar is based in Lewisville, Texas, and offers servicing, origination and real estate services to financial institutions and consumers.
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