S&P assigns B to Freedom Mortgage notes

S&P said it assigned B issue and 3 recovery ratings to Freedom Mortgage Corp.'s planned $500 million of senior unsecured notes due 2030. The 3 recovery rating reflects meaningful recovery (rounded estimate: 50%) in a default scenario.

The agency affirmed Freedom’s B ratings on Aug. 31.

The company will use the proceeds from both series to fully repay the senior unsecured notes due 2024 and 2025 and the remaining proceeds will be used to repay borrowings under the KeyBank revolving line. Freedom Mortgage Corp. will initially issue the new senior notes, and eventually, Freedom Mortgage Holdings LLC will assume the notes.

“We expect the transaction and the company's recent issuance of $800 million (increased from $600 million) senior unsecured notes due 2028, to be leverage neutral,” S&P said in a press release.

The outlook is stable.

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