| Item 1.01. |
Entry into a Material Definitive Agreement.
|
On December 4, 2020, Nationstar Mortgage Holdings Inc. (the
“Issuer”), a wholly-owned subsidiary of Mr. Cooper Group Inc.
(the “Company”), closed the previously announced offering (the
“Offering”) of $650,000,000 aggregate principal amount of the
Issuer’s 5.125% Senior Notes due 2030 (the “Notes”). The Issuer
sold the Notes to the initial purchasers in the Offering, which was
exempt from the registration requirements of the Securities Act of
1933, as amended (the “Securities Act”). The Notes were offered for
resale to purchasers reasonably believed to be “qualified
institutional buyers” as defined in Rule 144A under the Securities
Act and to non-U.S. persons
outside the United States in reliance on Regulation S under the
Securities Act.
The net proceeds from the Offering, together with approximately
$176 million of cash on hand, will be used to fund the
previously announced redemption of all $750,000,000 aggregate
principal amount of the Issuer’s 9.125% Senior Notes due 2026 and
to pay related fees and expenses, including approximately
$71 million of breakage costs and approximately
$5 million of certain related fees. The transaction will
result in a reduction in annual interest expense of approximately
$35 million.
The Notes were issued pursuant to the Indenture, dated as of
December 4, 2020 (the “Indenture”), among the Company, the
Issuer, the subsidiary guarantors party thereto and Wells Fargo
Bank, National Association, as trustee (the “Trustee”). Interest on
the Notes accrues beginning on December 4, 2020 at a rate of
5.125% per year. Interest on the Notes is payable semi-annually on
June 15 and December 15 of each year, commencing on
June 15, 2021. The Notes mature on December 15, 2030.
The Indenture contains customary terms, events of default and
covenants for an issuer of non-investment grade debt
securities. These covenants include limitations on, among other
things, incurring additional debt or issuing certain preferred
shares, paying dividends on or making other distributions in
respect of capital stock or making other restricted payments,
making certain investments, selling or transferring certain assets,
creating liens on certain assets to secure debt, consolidating,
merging, selling or otherwise disposing of all or substantially all
assets, entering into certain transactions with affiliates and
designating subsidiaries as unrestricted subsidiaries.
Prior to December 15, 2025, the Issuer may, at its option and
on any one or more occasions, redeem some or all of the Notes at a
make-whole price plus accrued and unpaid interest to the redemption
date.
Prior to December 15, 2023, the Issuer may, at its option and
on any one or more occasions, redeem up to 40% of the aggregate
principal amount of the Notes with an amount equal to or less than
the net proceeds from certain equity offerings at a redemption
price of 105.125% plus accrued and unpaid interest to the
redemption date.
On or after December 15, 2025, the Issuer may, at its option
and on any one or more occasions, redeem some or all of the Notes
at the applicable redemption prices set forth in the Indenture,
plus accrued and unpaid interest to the redemption date.
If a “change of control” (as defined in the Indenture) occurs, the
holders of the Notes may require the Issuer to purchase for cash
all or a portion of their Notes at a purchase price equal to 101%
of the principal amount of the Notes, plus accrued and unpaid
interest to the repurchase date.
The Notes will be senior unsecured obligations of the Issuer and
will rank senior in right of payment to any future subordinated
indebtedness of the Issuer, equally in right of payment with all
existing and future senior indebtedness of the Issuer and
effectively subordinated to any future secured indebtedness of the
Issuer to the extent of the value of collateral securing such
indebtedness.
The Notes will be fully and unconditionally guaranteed, jointly and
severally, on a senior unsecured basis by the Company and each of
Nationstar’s existing and future wholly-owned domestic subsidiaries
(other than certain excluded subsidiaries). The guarantees will be
senior unsecured obligations of the guarantors and will rank senior
in right of payment to any future subordinated indebtedness of the
guarantors, equally in right of payment with all existing and
future senior indebtedness of the guarantors and effectively
subordinated to any future secured
