Ocwen Financial Corporation announced the completion of the settlement of the previously announced Exchange Offer by its subsidiary Ocwen Loan Servicing, LLC (OLS) pursuant to which OLS issued $346.9 million aggregate principal amount of 8.375 percent Senior Secured Second Lien Notes.
The Senior Secured Second Lien Notes, which are known as the New Second Lien Notes, are due 2022 in exchange for $346.9 million aggregate principal amount, which is 99.1 percent of Ocwen’s 6.625 percent Senior Notes, known as Existing Notes, that had been tendered in the Exchange Offer, according to Ocwen.
The Exchange Offer was purely a debt-for-debt exchange offer and nor Ocwen or any of its subsidiaries received any cash proceeds from the transaction.
Ron Faris, President and CEO of Ocwen, affirmed the completion of the settlement with the following statement: “We are very pleased to have successfully completed these two important refinancing transactions.”
The SSTL and New Second Lien Notes are jointly and severally guaranteed by Ocwen, Ocwen Mortgage Servicing, Inc., Homeward Residential Holdings, Inc., Homeward Residential, Inc., and Automotive Capital Services, Inc., who are collectively known as the Guarantors. The New Second Lien Notes and the related guarantees will be unsubordinated obligations of OLS and the Guarantors, respectively, and will be secured, subject in each case to certain exceptions and permitted liens, by a second-priority lien on the assets of OLS and the Guarantors that secure the SSTL, which is known as the Collateral. The lien on the Collateral securing the New Second Lien Notes will be junior to the first priority lien securing the SSTL.
The New Second Lien Notes have not been registered with the Securities and Exchange under the Securities Act of 1933, also known as the Securities Act, or any state or foreign securities laws. The New Second Lien Notes may not be offered or sold in the United States or to any U.S. persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.