Walter Prices, Upsizes $575M Debt Offering

Mortgage & Real Estate

Walter Investment Management Corp. has upsized and priced a private placement debt offering, the proceeds of which will be used to purchase mortgage servicing rights.

The offering is now $575 million, up from $500 million.

Walter just announced a deal to purchase a $30 billion Fannie Mae MSR portfolio. That is part of a plan to purchase a total of $62 billion of MSRs.

Net proceeds are expected to be $564 million. The senior notes will pay interest at 7.875% annually. Payments will be made twice a year, on June 15 and Dec. 15 until the maturity date of Dec. 15, 2021.

The company just obtained a $1.6 billion secured credit facility which will also be used to finance MSR purchases.

Besides MSRs, proceeds will also be used to repay debt and for general corporate purposes. The proceeds from the additional $75 million will be used for general corporate purposes, Walter says.

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