Current Report Filing (8-k)
March 21 2018 - 5:28PM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
8-K
Current Report
Pursuant
to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 21, 2018
Ditech Holding Corporation
(Exact Name of Registrant as Specified in its Charter)
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Maryland
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001-
13417
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13-3950486
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(State or other jurisdiction of
incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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1100 Virginia Drive, Suite 100
Fort Washington, PA 19034
(Address of principal executive offices, including zip code)
(844)
714-8603
(Registrants telephone number, including area code)
Walter Investment Management Corp.
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form
8-K
filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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☐
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Soliciting material pursuant to Rule
14a-12
under the Exchange Act (17 CFR
240.14a-12)
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☐
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Pre-commencement
communications pursuant to Rule
14d-2(b)
under the Exchange Act (17 CFR
240.14d-2(b))
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☐
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Pre-commencement
communications pursuant to Rule
13e-4(c)
under the Exchange Act (17 CFR
240.13e-4(c))
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Indicate by check mark whether the registrant is an emerging growth company as defined
in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule
12b-2
of the Securities Exchange Act of 1934
(§240.12b-2
of this chapter).
Emerging growth company ☐
If an emerging
growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange
Act. ☐
Item 2.02
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Results of Operations and Financial Condition.
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The Second Amended and Restated Credit Agreement
(the
Credit Agreement
), dated as of February 9, 2018, by and among Ditech Holding Corporation (the
Company
), Credit Suisse AG, as administrative agent and collateral agent, and the lenders party thereto,
requires the Company to maintain, amongst other things, two asset coverage ratios tested quarterly: (i) Asset Coverage Ratio A, which is currently required to be not less than 1.40:1.00; and (ii) Asset Coverage Ratio B, which is required
to be not less than 1.00:1.00. Asset Coverage Ratio A and Asset Coverage Ratio B (and the related defined terms) are defined in the Credit Agreement, which was filed as an exhibit to the Companys Current Report on Form
8-K
dated February 9, 2018.
In connection with the proposed amendment to the Credit Agreement previously disclosed
in the Companys Current Report on Form
8-K
dated March 20, 2018, at the request of certain lenders under the Credit Agreement the Company is providing the following additional information:
Based on the Companys preliminary estimates of its balance sheet for the fiscal year ended December 31, 2017, as of that date, Asset Coverage Ratio
A is expected to be approximately 1.72:1:00 and Asset Coverage Ratio B is expected to be approximately 1.34:1.00. The details of the ratio calculations are set forth below. Capitalized terms are defined in the Credit Agreement.
Asset Coverage Ratio A Calculation
Asset Coverage
Ratio A shall mean, on any date of determination, the ratio of (a) Net Assets A of the Borrower and its Restricted Subsidiaries, as of such date of determination, to (b) all First Lien Indebtedness.
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Preliminary Unaudited
12/31/2017
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a
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the Balance Sheet Value of Cash and cash equivalents;
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285,969
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b
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the Balance Sheet Value of Servicing rights, net
minus
the Balance Sheet Value of Servicing rights related liabilities;
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782,120
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c
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the Balance Sheet Value of Servicer and protective advances, net
minus
the Balance Sheet Value of Servicing advance liabilities;
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329,855
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d
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the
sum
of (i) the sum of (y) the Balance Sheet Value of Residential loans and (z) the Balance Sheet Value of GNMA Buyout REO
minus
(ii) the sum of (w) the aggregate principal amount of Warehouse
Indebtedness with respect to which the assets described in clause (d)(i) are subject, (x) the Balance Sheet Value of the residential loans held in Residual Trusts and Non-Residual Trusts, (y) the Balance Sheet Value of reverse loans which are in
reverse GNMA securitization pools and (z) the Balance Sheet Value of residential loans which are in GNMA securitization pools that are eligible for early buy-out;
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371,810
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e
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the Balance Sheet Value of total assets less total liabilities of the Residual Trusts;
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57,652
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f
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the Balance Sheet Value of Premises and equipment, net;
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50,213
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g
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the Balance Sheet Value of Receivables, net
minus
the Balance Sheet Value of Receivables, net related to the Non-Residual Trusts; and
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122,142
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h
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the sum of (i) the Balance Sheet Value of Other assets, net
minus
(ii) the sum of (y) the Balance Sheet Value of Other assets related to the Residual Trusts and Non-Residual Trusts and (z) the
Balance Sheet Value of REO assets which are in reverse GNMA securitization pools and any GNMA Buyout REOs included in Net Assets A pursuant to clause (d) above.
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119,865
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Net Assets A
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2,119,626
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First Lien Indebtedness (Term Loan Balance)
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1,229,590
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Asset Coverage Ratio A
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1.72x
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Required Asset Coverage Ratio A
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1.40x
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Cushion / (Shortage)
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398,200
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Cushion %
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18.8
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%
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Asset Coverage Ratio B Calculation
Asset Coverage Ratio B shall mean, on any date of determination, the ratio of (a) Net Assets B of the Borrower and its Restricted Subsidiaries, as
of such date of determination, to (b) all First Lien Indebtedness.
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Preliminary Unaudited
12/31/2017
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a
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the lesser of (i) the Balance Sheet Value of Cash and cash equivalents and (ii) $250,000,000;
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250,000
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b
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the Balance Sheet Value of Servicing rights, net minus the Balance Sheet Value of Servicing rights related liabilities;
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782,120
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c
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(if positive) (i) the then-applicable Servicer and Protective Advance Percentage multiplied by the Balance Sheet Value of Servicer and protective advances, net minus (ii) the Balance Sheet Value of Servicing
advance liabilities;
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289,188
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d
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(if positive) the sum of (i) 90% of (v) the Balance Sheet Value of Residential loans minus (w) the Balance Sheet Value of the residential loans held in Residual Trusts and Non-Residual Trusts, minus (x) the Balance
Sheet Value of reverse loans which are in reverse GNMA securitization pools, minus (y) the Balance Sheet Value of residential loans which are in GNMA securitization pools that are eligible for early buy-out and minus (z) the Balance Sheet Value of
GNMA Buyouts and (ii) the then-applicable GNMA Buyout Percentage multiplied by the sum of (x) GNMA Buyouts and (y) the Balance Sheet Value of GNMA Buyout REO, minus (iii) the aggregate principal amount of Warehouse Indebtedness to which the assets
described in clause (d)(i)(v) and (d)(ii) are subject;
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246,855
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e
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the sum of 75% of (i) the Balance Sheet Value of total assets minus (ii) the Balance Sheet Value of total liabilities, in each case, of the Residual Trusts;
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43,239
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f
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50% of MSR Holdback Receivables; and
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15,668
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g
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75% of Servicing Fee Receivables.
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18,629
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Net Assets B
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1,645,699
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First Lien Indebtedness (Term Loan Balance)
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1,229,590
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Asset Coverage Ratio B
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1.34x
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Required Asset Coverage Ratio B
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1.00x
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Cushion / (Shortage)
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416,109
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Cushion %
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25.3
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%
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The preliminary asset coverage ratios and other financial information presented above is presented as of the year ended
December 31, 2017. Such information has not been adjusted for any changes in valuation, events, transactions, payments (including term loan repayments) or other items that have occurred or may occur after that date.
The preliminary financial information contained herein is based on managements internal reporting and remains subject to audit and to adjustment as the
Company finalizes its fiscal year 2017 audited financial statements. In addition, such audited financial statements will contain notes thereto, which will provide further information important to an understanding of the Companys financial
condition and results of operations, including the information set forth above. The Company has prepared the preliminary financial information contained herein but its independent registered public accounting firm has not completed its audit or
performed any review or other procedures with respect to such preliminary financial information and, accordingly, such preliminary financial information may change.
The information furnished pursuant to Item 2.02 shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934,
as amended, is not subject to the liabilities of that section and is not deemed incorporated by reference in any of the Companys filing under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated
therein by reference.
2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
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Ditech Holding Corporation
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Date: March 21, 2018
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By:
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/s/ Gerald A. Lombardo
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Gerald A. Lombardo, Chief Financial Officer
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3