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): July 17, 2014
(April 1, 2014)
HOME LOAN SERVICING SOLUTIONS, LTD.
(Exact name of registrant as specified in its charter)
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Cayman Islands | | 1-35431 | | 98-0683664 |
(State or other jurisdiction of incorporation) | | (Commission File Number) | | (I.R.S. Employer Identification No.) |
Home Loan Servicing Solutions, Ltd.
c/o Intertrust Corporate Services (Cayman) Limited
190 Elgin Avenue
George Town, Grand Cayman
KY1-9005
Cayman Islands
Registrant’s telephone number, including area code: (345) 945-3727
Not applicable.
(Former name or former address, if changed since last report)
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| 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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| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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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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| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Item 1.01 | Entry into a Material Definitive Agreement |
On July 16, 2014, HLSS Servicer Advance Receivables Trust (the “HSART Facility”), entered into a separate amendment agreement (each an “Amendment Agreement”) with each of Barclays Bank plc, Wells Fargo Bank, N.A. and Credit Suisse AG, Cayman Islands Branch (each a “VFN Noteholder”) to extend the expected maturity date of the variable funding notes held by each VFN Noteholder to August 28, 2015. Each Amendment Agreement amends an Indenture Supplement dated as of August 30, 2013 for a series of variable funding notes issued by the HSART Facility.
This description of the Amendment Agreements is not complete and is qualified in its entirety by reference to the Amendment Agreements, copies of which are attached hereto as Exhibit 10.1, Exhibit 10.2 and Exhibit 10.3 and which are incorporated herein by reference.
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Item 2.02 | Results of Operations and Financial Condition. |
The news release of Home Loan Servicing Solutions, Ltd., dated July 17, 2014, announcing its results for the second quarter of 2014 is attached hereto as Exhibit 99.1. The information contained under Item 2.02 in this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, is being furnished and, as a result, such information shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act) or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
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Item 9.01 | Financial Statements and Exhibits. |
(a)-(c) Not applicable.
(d) Exhibits:
Exhibit No.
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10.1 | | Amendment No.4 dated as of July 16, 2014 to the Second Amended and Restated Series 2012-VF1 Indenture Supplement dated as of August 30, 2013 to the Sixth Amended and Restated Indenture, dated as of January 17, 2014. |
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10.2 | | Amendment No.4 dated as of July 16, 2014 to the Second Amended and Restated Series 2012-VF2 Indenture Supplement dated as of August 30, 2013 to the Sixth Amended and Restated Indenture, dated as of January 17, 2014. |
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10.3 | | Amendment No.4 dated as of July 16, 2014 to the Second Amended and Restated Series 2012-VF3 Indenture Supplement dated as of August 30, 2013 to the Sixth Amended and Restated Indenture, dated as of January 17, 2014. |
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99.1 | | Text of press release by Home Loan Servicing Solutions, Ltd. dated July 17, 2014. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
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| HOME LOAN SERVICING SOLUTIONS, LTD. |
| (Registrant) |
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| By: | | /s/ James Lauter |
| | | James Lauter |
| | | Senior Vice President and Chief Financial Officer (On behalf of the Registrant and as its principal financial officer) |
Date: July 17, 2014
HLSS SERVICER ADVANCE RECEIVABLES TRUST,
as Issuer,
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Indenture Trustee, Calculation Agent, Paying Agent and Securities Intermediary,
HLSS HOLDINGS, LLC,
as Administrator and as Servicer (on and after the MSR Transfer Date),
OCWEN LOAN SERVICING, LLC,
as a Subservicer and as Servicer (prior to the MSR Transfer Date),
and
BARCLAYS BANK PLC,
as Administrative Agent and
as sole Holder of the Class A-VF1 Variable Funding Notes, the Class B-VF1 Variable Funding Notes, the Class C-VF1 Variable Funding Notes and the Class D-VF1 Variable Funding Notes
__________
AMENDMENT NO. 4
dated as of July 16, 2014
to the
SECOND AMENDED AND RESTATED SERIES 2012-VF1 INDENTURE SUPPLEMENT
dated as of August 30, 2013
to the
SIXTH AMENDED AND RESTATED INDENTURE,
dated as of January 17, 2014
__________
HLSS SERVICER ADVANCE RECEIVABLES TRUST
ADVANCE RECEIVABLES BACKED NOTES, SERIES 2012-VF1
AMENDMENT NO. 4 TO SERIES 2012-VF1 AGREEMENTS
This Amendment No. 4, dated as of July 16, 2014 (this “Amendment”), to the Second Amended and Restated Series 2012-VF1 Indenture Supplement, dated as of August 30, 2013 (as has been, and as may be further, amended, restated, supplemented or otherwise modified from time to time, the “Indenture Supplement”), by and among HLSS Servicer Advance Receivables Trust, as issuer (the “Issuer”), Deutsche Bank National Trust Company, as indenture trustee (the “Indenture Trustee”), as calculation agent (the “Calculation Agent”), as paying agent (the “Paying Agent”) and as securities intermediary (the “Securities Intermediary”), HLSS Holdings, LLC (“HLSS”), as administrator (in such capacity, the “Administrator”) and as servicer, on and after the related MSR Transfer Date (in such capacity, the “Servicer”), Ocwen Loan Servicing, LLC (“OLS”), as a subservicer (in such capacity, the “Servicer”), and as servicer, prior to the related MSR Transfer Date (in such capacity, the “Subservicer”), and Barclays Bank plc (“Barclays” or “Purchaser”), as administrative agent (the “Administrative Agent”), to that certain Sixth Amended and Restated Indenture, dated as of January 17, 2014 (as amended, supplemented, restated or otherwise modified from time to time, the “Indenture”), among the Issuer, the Servicer, the Administrator, the Indenture Trustee, the Calculation Agent, the Paying Agent, the Securities Intermediary, Barclays, as administrative agent, Wells Fargo Securities, LLC, as administrative agent, and Credit Suisse AG, New York Bank, as administrative agent. Capitalized terms used herein but not otherwise defined shall have the meanings given to such terms in the Indenture or the Indenture Supplement, as applicable.
WHEREAS, Section 12.2 of the Indenture provides, among other things, that subject to the terms and provisions of each Indenture Supplement with respect to any amendment of such Indenture Supplement, the parties to the Indenture may at any time enter into an amendment to the Indenture, including any Indenture Supplement, with prior notice to the Note Rating Agency and the consent of Holders of more than 50% (by Class Invested Amount) of each Series or Class of Notes affected by such amendment of the Indenture, including any Indenture Supplement, for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of the Indenture, of modifying in any manner the rights of the Holders of the Notes of each such Series or Class under the Indenture or any Indenture Supplement, upon delivery of an Issuer Tax Opinion (unless the Noteholders unanimously consent to waive such opinion); provided, however, that no such amendment will modify any of the enumerated provisions set forth in Section 12.2 without the consent of the Holder of each Outstanding Note affected thereby;
WHEREAS, the Purchaser owns 100% of the Class A-VF1 Variable Funding Notes, the Class B-VF1 Variable Funding Notes, the Class C-VF1 Variable Funding Notes and the Class D-VF1 Variable Funding Notes, which are the only Outstanding Notes issued pursuant to the Indenture Supplement;
WHEREAS, Section 12.3 of the Indenture provides that the Issuer shall deliver to the Indenture Trustee an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by the Indenture and that all conditions precedent thereto have been satisfied (the “Authorization Opinion”);
WHEREAS, the parties hereto desire to amend the Indenture Supplement as described below;
WHEREAS, this Amendment is not effective until the satisfaction of the terms and provisions of Section 12.2 and Section 12.3 of the Indenture;
NOW, THEREFORE, in consideration of the premises and covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:
Section 1.Amendment.
(a) Section 2 of the Indenture Supplement is hereby amended by deleting the definition of “Expected Repayment Date” in its entirety and replacing it with the following:
““Expected Repayment Date” for the Series 2012-VF1 Notes means August 28, 2015.”
Section 2. Conditions to Effectiveness of this Amendment.
(a) This Amendment shall become effective, solely as of August 29, 2014, upon the latest to occur of the following (the “Effective Date”):
(i) the execution and delivery of this Amendment by all parties hereto;
(ii) prior notice to the Note Rating Agency;
(iii) the delivery of the Issuer Tax Opinion; and
(iv) the delivery of the Authorization Opinion.
(b) Effect of Amendment. Except as expressly amended and modified by this Amendment, all provisions of the Indenture Supplement and the Indenture shall remain in full force and effect and all such provisions shall apply equally to the terms and conditions set forth herein. This Amendment shall be effective as of the Effective Date upon the satisfaction of the conditions precedent set forth in Section 2(a) hereof and shall not be effective for any period prior to the Effective Date. After this Amendment becomes effective, all references in the Indenture Supplement or the Indenture to “this Indenture Supplement,” “this Indenture,” “hereof,” “herein” or words of similar effect referring to such Indenture Supplement and Indenture shall be deemed to be references to the Indenture Supplement or the Indenture, as applicable, as amended by this Amendment. This Amendment shall not be deemed to expressly or impliedly waive, amend or supplement any provision of the Indenture Supplement or the Indenture other than as set forth herein.
Section 3. Representations and Warranties. (a) The Purchaser hereby represents and warrants that as of the date hereof (i) it is the sole Holder of each of the Class A-VF1 Variable Funding Notes, the Class B-VF1 Variable Funding Notes, the Class C-VF1 Variable Funding Notes and the Class D-VF1 Variable Funding Notes, (ii) it is duly authorized to deliver this Amendment
to the Indenture Trustee and such power has not been granted or assigned to any other Person, and (iii) the Indenture Trustee may conclusively rely upon this Amendment.
(b) In its capacity as Note Registrar, the Indenture Trustee confirms that the Note Register reflects the Purchaser as the sole Holder of all Notes currently Outstanding under the Indenture Supplement. Such Holder’s consent to the terms of this Amendment is evidenced by its signature hereto.
(c) OLS hereby represents and warrants that the execution and effectiveness of this Amendment shall not materially affect it, in its capacity as the Subservicer under any of the Designated Servicing Agreements or any of the Transaction Documents.
Section 4. Expenses. The Receivables Seller hereby agrees that in addition to any costs otherwise required to be paid pursuant to the Transaction Documents, the Receivables Seller shall be responsible for the payments of the reasonable and documented legal fees and out-of-pocket expenses of legal counsel to the Administrative Agent, the Noteholders, the Owner Trustee and the Indenture Trustee incurred in connection with the consummation of this Amendment and all other documents executed or delivered in connection therewith.
Section 5. Representations; Ratifications Covenants: (a) In order to induce the Noteholders and the Administrative Agent to execute and deliver this Amendment, the Issuer, HLSS, OLS and Servicer hereby represent and warrant to the Noteholders and the Administrative Agent that as of the date hereof, the Issuer, HLSS, OLS and Servicer are in full compliance with all of the terms and conditions of the Indenture and the other Transaction Documents and no Default or Event of Default has occurred and is continuing under the Indenture or any other Transaction Documents.
(b) The parties hereto ratify all terms of the existing Indenture other than those amended hereby, and ratify those provisions as amended hereby.
Section 6. Entire Agreement. The Indenture and the Indenture Supplement, as amended by this Amendment, constitute the entire agreement among the parties hereto with respect to the subject matter hereof, and fully supersedes any prior or contemporaneous agreements relating to such subject matter.
Section 7. Successors and Assigns. This Amendment shall be binding upon the parties hereto and their respective successors and assigns.
Section 8. Section Headings. The various headings and sub-headings of this Amendment are inserted for convenience only and shall not affect the meaning or interpretation of this Amendment or the Indenture or any provision hereof or thereof.
Section 9. GOVERNING LAW. THIS AMENDMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO OR IN CONNECTION WITH THIS AMENDMENT, THE RELATIONSHIP OF THE PARTIES HERETO, AND/OR THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES HERETO SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO THE CONFLICT OF LAW PROVISIONS THEREOF OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW) AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 10. Recitals. The statements contained in the recitals to this Amendment shall be taken as the statements of the Issuer, and the Indenture Trustee (in each capacity) assumes no responsibility for their correctness. The Indenture Trustee makes no representation as to the validity or sufficiency of this Amendment (except as may be made with respect to the validity of its own obligations hereunder). In entering into this Amendment, the Indenture Trustee shall be entitled to the benefit of every provision of the Indenture and the Indenture Supplement relating to the conduct of or affecting the liability of or affording protection to the Indenture Trustee.
Section 11. Owner Trustee Limitation of Liability. It is expressly understood and agreed by the parties hereto that (a) this Amendment is executed and delivered by Wilmington Trust Company, not individually or personally, but solely as Owner Trustee of the Issuer under the Trust Agreement, in the exercise of the powers and authority conferred and vested in it, (b) each of the representations, undertakings and agreements herein made on the part of the Issuer is made and intended not as a personal representation, undertaking and agreement by Wilmington Trust Company but is made and intended for the purpose of binding only the Issuer, (c) nothing herein contained shall be construed as creating any liability on Wilmington Trust Company, individually or personally, to perform any covenant either expressed or implied contained herein, all such liability, if any, being expressly waived by the parties hereto and by any Person claiming by, through or under the parties hereto and (d) under no circumstances shall Wilmington Trust Company be personally liable for the payment of any indebtedness or expenses of the Issuer or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Issuer under this Amendment.
Section 12. Counterparts. This Amendment may be executed in one or more counterparts and by the different parties hereto on separate counterparts, including without limitation counterparts transmitted by facsimile, each of which, when so executed, shall be deemed to be an original and such counterparts, together, shall constitute one and the same agreement.
[signature pages follow]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written.
HLSS SERVICER ADVANCE RECEIVABLES TRUST, as Issuer
By: Wilmington Trust Company, not in its individual capacity but solely as Owner Trustee
By:
Name:
Title:
Amendment No. 4 to Series 2012-VF1 Second A&R Indenture Supplement
DEUTSCHE BANK NATIONAL TRUST COMPANY, as Indenture Trustee, Calculation Agent, Paying Agent and Securities Intermediary and not in its individual capacity
Amendment No. 4 to Series 2012-VF1 Second A&R Indenture Supplement
HLSS HOLDINGS, LLC, as Administrator and as Servicer (on and after the MSR Transfer Date)
By:
Name:
Title:
Amendment No. 4 to Series 2012-VF1 Second A&R Indenture Supplement
OCWEN LOAN SERVICING, LLC, as a Subservicer and as Servicer (prior to the MSR Transfer Date)
Amendment No. 4 to Series 2012-VF1 Second A&R Indenture Supplement
BARCLAYS BANK, PLC,
as Administrative Agent and as sole Holder of the HLSS Servicer Advance Receivables Trust, Advance Receivables Backed Notes, Series 2012-VF1 Class A-VF1 Variable Funding Notes, the Class B-VF1 Variable Funding Notes, the Class C-VF1 Variable Funding Notes and the Class D-VF1 Variable Funding Notes
Amendment No. 4 to Series 2012-VF1 Second A&R Indenture Supplement
HLSS SERVICER ADVANCE RECEIVABLES TRUST,
as Issuer,
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Indenture Trustee, Calculation Agent, Paying Agent and Securities Intermediary,
HLSS HOLDINGS, LLC,
as Administrator and as Servicer (on and after the MSR Transfer Date),
OCWEN LOAN SERVICING, LLC,
as a Subservicer and as Servicer (prior to the MSR Transfer Date),
WELLS FARGO SECURITIES, LLC
as Administrative Agent
and
WELLS FARGO BANK, N.A.
as sole Holder of the Class A-VF2 Variable Funding Notes, the Class B-VF2 Variable Funding Notes, the Class C-VF2 Variable Funding Notes and the Class D-VF2 Variable Funding Notes
__________
AMENDMENT NO. 4
dated as of July 16, 2014
to the
SECOND AMENDED AND RESTATED SERIES 2012-VF2 INDENTURE SUPPLEMENT
dated as of August 30, 2013
to the
SIXTH AMENDED AND RESTATED INDENTURE,
dated as of January 17, 2014
__________
HLSS SERVICER ADVANCE RECEIVABLES TRUST
ADVANCE RECEIVABLES BACKED NOTES, SERIES 2012-VF2
AMENDMENT NO. 4 TO SERIES 2012-VF2 AGREEMENTS
This Amendment No. 4, dated as of July 16, 2014 (this “Amendment”), to the Second Amended and Restated Series 2012-VF2 Indenture Supplement, dated as of August 30, 2013 (as has been, and as may be further, amended, restated, supplemented or otherwise modified from time to time, the “Indenture Supplement”), by and among HLSS Servicer Advance Receivables Trust, as issuer (the “Issuer”), Deutsche Bank National Trust Company, as indenture trustee (the “Indenture Trustee”), as calculation agent (the “Calculation Agent”), as paying agent (the “Paying Agent”) and as securities intermediary (the “Securities Intermediary”), HLSS Holdings, LLC (“HLSS”), as administrator (in such capacity, the “Administrator”) and as servicer, on and after the related MSR Transfer Date (in such capacity, the “Servicer”), Ocwen Loan Servicing, LLC (“OLS”), as a subservicer (in such capacity, the “Servicer”), and as servicer, prior to the related MSR Transfer Date (in such capacity, the “Subservicer”), and Wells Fargo Securities, LLC (“WFS”), as administrative agent (the “Administrative Agent”), to that certain Sixth Amended and Restated Indenture, dated as of January 17, 2014 (as amended, supplemented, restated or otherwise modified from time to time, the “Indenture”), among the Issuer, the Servicer, the Administrator, the Indenture Trustee, the Calculation Agent, the Paying Agent, the Securities Intermediary, WFS, as administrative agent, Barclays Bank PLC, as administrative agent, and Credit Suisse AG, New York Bank, as administrative agent. Capitalized terms used herein but not otherwise defined shall have the meanings given to such terms in the Indenture or the Indenture Supplement, as applicable.
WHEREAS, Section 12.2 of the Indenture provides, among other things, that subject to the terms and provisions of each Indenture Supplement with respect to any amendment of such Indenture Supplement, the parties to the Indenture may at any time enter into an amendment to the Indenture, including any Indenture Supplement, with prior notice to the Note Rating Agency and the consent of Holders of more than 50% (by Class Invested Amount) of each Series or Class of Notes affected by such amendment of the Indenture, including any Indenture Supplement, for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of the Indenture, of modifying in any manner the rights of the Holders of the Notes of each such Series or Class under the Indenture or any Indenture Supplement, upon delivery of an Issuer Tax Opinion (unless the Noteholders unanimously consent to waive such opinion); provided, however, that no such amendment will modify any of the enumerated provisions set forth in Section 12.2 without the consent of the Holder of each Outstanding Note affected thereby;
WHEREAS, Wells Fargo Bank, N.A. (the “VF2 Noteholder”) owns 100% of the Class A-VF2 Variable Funding Notes, the Class B-VF2 Variable Funding Notes, the Class C-VF2 Variable Funding Notes and the Class D-VF2 Variable Funding Notes, which are the only Outstanding Notes issued pursuant to the Indenture Supplement;
WHEREAS, Section 12.3 of the Indenture provides that the Issuer shall deliver to the Indenture Trustee an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by the Indenture and that all conditions precedent thereto have been satisfied (the “Authorization Opinion”);
WHEREAS, the parties hereto desire to amend the Indenture Supplement as described below;
WHEREAS, this Amendment is not effective until the satisfaction of the terms and provisions of Section 12.2 and Section 12.3 of the Indenture;
NOW, THEREFORE, in consideration of the premises and covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:
Section 1.Amendment.
(a) Section 2 of the Indenture Supplement is hereby amended by deleting the definition of “Expected Repayment Date” in its entirety and replacing it with the following:
““Expected Repayment Date” means, for the Series 2012-VF2 Notes, August 28, 2015.”
Section 2. Conditions to Effectiveness of this Amendment.
(a) This Amendment shall become effective, solely as of August 29, 2014, upon the latest to occur of the following (the “Effective Date”):
(i) the execution and delivery of this Amendment by all parties hereto;
(ii) prior notice to the Note Rating Agency;
(iii) the delivery of the Issuer Tax Opinion; and
(iv) the delivery of the Authorization Opinion.
(b) Effect of Amendment. Except as expressly amended and modified by this Amendment, all provisions of the Indenture Supplement and the Indenture shall remain in full force and effect and all such provisions shall apply equally to the terms and conditions set forth herein. This Amendment shall be effective as of the Effective Date upon the satisfaction of the conditions precedent set forth in Section 2(a) hereof and shall not be effective for any period prior to the Effective Date. After this Amendment becomes effective, all references in the Indenture Supplement or the Indenture to “this Indenture Supplement,” “this Indenture,” “hereof,” “herein” or words of similar effect referring to such Indenture Supplement and Indenture shall be deemed to be references to the Indenture Supplement or the Indenture, as applicable, as amended by this Amendment. This Amendment shall not be deemed to expressly or impliedly waive, amend or supplement any provision of the Indenture Supplement or the Indenture other than as set forth herein.
Section 3. Representations and Warranties. (a) The VF2 Noteholder hereby represents and warrants that as of the date hereof (i) it is the sole Holder of each of the Class A-VF2 Variable Funding Notes, the Class B-VF2 Variable Funding Notes, the Class C-VF2 Variable Funding Notes and the Class D-VF2 Variable Funding Notes, (ii) it is duly authorized to deliver
this Amendment to the Indenture Trustee and such power has not been granted or assigned to any other Person, and (iii) the Indenture Trustee may conclusively rely upon this Amendment.
(b) In its capacity as Note Registrar, the Indenture Trustee confirms that the Note Register reflects the VF2 Noteholder as the sole Holder of all Notes currently Outstanding under the Indenture Supplement. Such Holder’s consent to the terms of this Amendment is evidenced by its signature hereto.
(c) OLS hereby represents and warrants that the execution and effectiveness of this Amendment shall not materially affect it, in its capacity as the Subservicer under any of the Designated Servicing Agreements or any of the Transaction Documents.
Section 4. Expenses. The Receivables Seller hereby agrees that in addition to any costs otherwise required to be paid pursuant to the Transaction Documents, the Receivables Seller shall be responsible for the payments of the reasonable and documented legal fees and out-of-pocket expenses of legal counsel to the Administrative Agent, the Noteholders, the Owner Trustee and the Indenture Trustee incurred in connection with the consummation of this Amendment and all other documents executed or delivered in connection therewith.
Section 5. Representations; Ratifications Covenants: (a) In order to induce the Noteholders and the Administrative Agent to execute and deliver this Amendment, the Issuer, HLSS, OLS and Servicer hereby represent and warrant to the Noteholders and the Administrative Agent that as of the date hereof, the Issuer, HLSS, OLS and Servicer are in full compliance with all of the terms and conditions of the Indenture and the other Transaction Documents and no Default or Event of Default has occurred and is continuing under the Indenture or any other Transaction Documents.
(b) The parties hereto ratify all terms of the existing Indenture other than those amended hereby, and ratify those provisions as amended hereby.
Section 6. Entire Agreement. The Indenture and the Indenture Supplement, as amended by this Amendment, constitute the entire agreement among the parties hereto with respect to the subject matter hereof, and fully supersedes any prior or contemporaneous agreements relating to such subject matter.
Section 7. Successors and Assigns. This Amendment shall be binding upon the parties hereto and their respective successors and assigns.
Section 8. Section Headings. The various headings and sub-headings of this Amendment are inserted for convenience only and shall not affect the meaning or interpretation of this Amendment or the Indenture or any provision hereof or thereof.
Section 9. GOVERNING LAW. THIS AMENDMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO OR IN CONNECTION WITH THIS AMENDMENT, THE RELATIONSHIP OF THE PARTIES HERETO, AND/OR THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES HERETO SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO THE CONFLICT OF LAW PROVISIONS THEREOF OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW) AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 10. Recitals. The statements contained in the recitals to this Amendment shall be taken as the statements of the Issuer, and the Indenture Trustee (in each capacity) assumes no responsibility for their correctness. The Indenture Trustee makes no representation as to the validity or sufficiency of this Amendment (except as may be made with respect to the validity of its own obligations hereunder). In entering into this Amendment, the Indenture Trustee shall be entitled to the benefit of every provision of the Indenture and the Indenture Supplement relating to the conduct of or affecting the liability of or affording protection to the Indenture Trustee.
Section 11. Owner Trustee Limitation of Liability. It is expressly understood and agreed by the parties hereto that (a) this Amendment is executed and delivered by Wilmington Trust Company, not individually or personally, but solely as Owner Trustee of the Issuer under the Trust Agreement, in the exercise of the powers and authority conferred and vested in it, (b) each of the representations, undertakings and agreements herein made on the part of the Issuer is made and intended not as a personal representation, undertaking and agreement by Wilmington Trust Company but is made and intended for the purpose of binding only the Issuer, (c) nothing herein contained shall be construed as creating any liability on Wilmington Trust Company, individually or personally, to perform any covenant either expressed or implied contained herein, all such liability, if any, being expressly waived by the parties hereto and by any Person claiming by, through or under the parties hereto and (d) under no circumstances shall Wilmington Trust Company be personally liable for the payment of any indebtedness or expenses of the Issuer or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Issuer under this Amendment.
Section 12. Counterparts. This Amendment may be executed in one or more counterparts and by the different parties hereto on separate counterparts, including without limitation counterparts transmitted by facsimile, each of which, when so executed, shall be deemed to be an original and such counterparts, together, shall constitute one and the same agreement.
[signature pages follow]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written.
HLSS SERVICER ADVANCE RECEIVABLES TRUST, as Issuer
By: Wilmington Trust Company, not in its individual capacity but solely as Owner Trustee
Amendment No. 4 to Series 2012-VF2 Second A&R Indenture Supplement
DEUTSCHE BANK NATIONAL TRUST COMPANY, as Indenture Trustee, Calculation Agent, Paying Agent and Securities Intermediary and not in its individual capacity
Amendment No. 4 to Series 2012-VF2 Second A&R Indenture Supplement
HLSS HOLDINGS, LLC, as Administrator and as Servicer (on and after the MSR Transfer Date)
Amendment No. 4 to Series 2012-VF2 Second A&R Indenture Supplement
OCWEN LOAN SERVICING, LLC, as a Subservicer and as Servicer (prior to the MSR Transfer Date)
Amendment No. 4 to Series 2012-VF2 Second A&R Indenture Supplement
WELLS FARGO SECURITIES, LLC,
as Administrative Agent
Amendment No. 4 to Series 2012-VF2 Second A&R Indenture Supplement
WELLS FARGO BANK, N. A.,
as sole Holder of the HLSS Servicer Advance Receivables Trust, Advance Receivables Backed Notes, Series 2012-VF2 Class A-VF2 Variable Funding Notes, Class B-VF2 Variable Funding Notes, Class C-VF2 Variable Funding Notes and Class D-VF2 Variable Funding Notes
Amendment No. 4 to Series 2012-VF2 Second A&R Indenture Supplement
HLSS SERVICER ADVANCE RECEIVABLES TRUST,
as Issuer,
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Indenture Trustee, Calculation Agent, Paying Agent and Securities Intermediary,
HLSS HOLDINGS, LLC,
as Administrator and as Servicer (on and after the MSR Transfer Date),
OCWEN LOAN SERVICING, LLC,
as a Subservicer and as Servicer (prior to the MSR Transfer Date),
CREDIT SUISSE AG, NEW YORK BRANCH,
as Administrative Agent,
CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH
as Committed Purchaser and Holder of the Class A-VF3 Variable Funding Notes, the Class B-VF3 Variable Funding Notes, the Class C-VF3 Variable Funding Notes and the Class D-VF3 Variable Funding Notes
and
ALPINE SECURITIZATION CORP.
as Conduit Purchaser and Holder of the Class A-VF3 Variable Funding Notes, the Class B-VF3 Variable Funding Notes, the Class C-VF3 Variable Funding Notes and the Class D-VF3 Variable Funding Notes
__________
AMENDMENT NO. 4
dated as of July 16, 2014
to the
SECOND AMENDED AND RESTATED SERIES 2012-VF3 INDENTURE SUPPLEMENT
dated as of August 30, 2013
to the
SIXTH AMENDED AND RESTATED INDENTURE,
dated as of January 17, 2014
HLSS SERVICER ADVANCE RECEIVABLES TRUST
ADVANCE RECEIVABLES BACKED NOTES, SERIES 2012-VF3
AMENDMENT NO. 4 TO SERIES 2012-VF3 AGREEMENTS
This Amendment No. 4, dated as of July 16, 2014 (this “Amendment”), to the Second Amended and Restated Series 2012-VF3 Indenture Supplement, dated as of August 30, 2013 (as has been, and as may be further, amended, restated, supplemented or otherwise modified from time to time, the “Indenture Supplement”), by and among HLSS Servicer Advance Receivables Trust, as issuer (the “Issuer”), Deutsche Bank National Trust Company, as indenture trustee (the “Indenture Trustee”), as calculation agent (the “Calculation Agent”), as paying agent (the “Paying Agent”) and as securities intermediary (the “Securities Intermediary”), HLSS Holdings, LLC (“HLSS”), as administrator (in such capacity, the “Administrator”) and as servicer, on and after the related MSR Transfer Date (in such capacity, the “Servicer”), Ocwen Loan Servicing, LLC (“OLS”), as a subservicer (in such capacity, the “Servicer”), and as servicer, prior to the related MSR Transfer Date (in such capacity, the “Subservicer”), and Credit Suisse AG, New York Bank (“Credit Suisse”), as administrative agent (the “Administrative Agent”), to that certain Sixth Amended and Restated Indenture, dated as of January 17, 2014 (as amended, supplemented, restated or otherwise modified from time to time, the “Indenture”), among the Issuer, the Servicer, the Administrator, the Indenture Trustee, the Calculation Agent, the Paying Agent, the Securities Intermediary, Credit Suisse, as administrative agent, Barclays Bank PLC, as administrative agent, and Wells Fargo Securities, LLC, as administrative agent. Capitalized terms used herein but not otherwise defined shall have the meanings given to such terms in the Indenture or the Indenture Supplement, as applicable.
WHEREAS, Section 12.2 of the Indenture provides, among other things, that subject to the terms and provisions of each Indenture Supplement with respect to any amendment of such Indenture Supplement, the parties to the Indenture may at any time enter into an amendment to the Indenture, including any Indenture Supplement, with prior notice to the Note Rating Agency and the consent of Holders of more than 50% (by Class Invested Amount) of each Series or Class of Notes affected by such amendment of the Indenture, including any Indenture Supplement, for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of the Indenture, of modifying in any manner the rights of the Holders of the Notes of each such Series or Class under the Indenture or any Indenture Supplement, upon delivery of an Issuer Tax Opinion (unless the Noteholders unanimously consent to waive such opinion); provided, however, that no such amendment will modify any of the enumerated provisions set forth in Section 12.2 without the consent of the Holder of each Outstanding Note affected thereby;
WHEREAS, the Committed Purchaser and the Conduit Purchaser, together own 100% of the Class A-VF3 Variable Funding Notes, the Class B-VF3 Variable Funding Notes, the Class C-VF3 Variable Funding Notes and the Class D-VF3 Variable Funding Notes, which are the only Outstanding Notes issued pursuant to the Indenture Supplement;
WHEREAS, Section 12.3 of the Indenture provides that the Issuer shall deliver to the Indenture Trustee an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by the Indenture and that all conditions precedent thereto have been satisfied (the “Authorization Opinion”);
WHEREAS, the parties hereto desire to amend the Indenture Supplement as described below;
WHEREAS, this Amendment is not effective until the satisfaction of the terms and provisions of Section 12.2 and Section 12.3 of the Indenture;
NOW, THEREFORE, in consideration of the premises and covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:
Section 1.Amendment.
(a) Section 2 of the Indenture Supplement is hereby amended by deleting the definition of “Expected Repayment Date” in its entirety and replacing it with the following:
““Expected Repayment Date” means, for the Series 2012-VF3 Notes, August 28, 2015.”
Section 2. Conditions to Effectiveness of this Amendment.
(a) This Amendment shall become effective, solely as of August 29, 2014, upon the latest to occur of the following (the “Effective Date”):
(i) the execution and delivery of this Amendment by all parties hereto;
(ii) prior notice to the Note Rating Agency;
(iii) the delivery of the Issuer Tax Opinion; and
(iv) the delivery of the Authorization Opinion.
(b) Effect of Amendment. Except as expressly amended and modified by this Amendment, all provisions of the Indenture Supplement and the Indenture shall remain in full force and effect and all such provisions shall apply equally to the terms and conditions set forth herein. This Amendment shall be effective as of the Effective Date upon the satisfaction of the conditions precedent set forth in Section 2(a) hereof and shall not be effective for any period prior to the Effective Date. After this Amendment becomes effective, all references in the Indenture Supplement or the Indenture to “this Indenture Supplement,” “this Indenture,” “hereof,” “herein” or words of similar effect referring to such Indenture Supplement and Indenture shall be deemed to be references to the Indenture Supplement or the Indenture, as applicable, as amended by this Amendment. This Amendment shall not be deemed to expressly or impliedly waive, amend or supplement any provision of the Indenture Supplement or the Indenture other than as set forth herein.
Section 3. Representations and Warranties. (a) The Committed Purchaser and Alpine Securitization Corp., as conduit purchaser (the “Conduit Purchaser”) hereby represent and warrant that as of the date hereof (i) they are the sole Holders of the Class A-VF3 Variable Funding Notes, the Class B-VF3 Variable Funding Notes, the Class C-VF3 Variable Funding Notes and the Class D-VF3 Variable Funding Notes, (ii) each is duly authorized to deliver this Amendment to the
Indenture Trustee and such power has not been granted or assigned to any other Person, and (iii) the Indenture Trustee may conclusively rely upon this Amendment.
(b) In its capacity as Note Registrar, the Indenture Trustee confirms that the Note Register reflects the Committed Purchaser and the Conduit Purchaser as the sole Holders of all Notes currently Outstanding under the Indenture Supplement. Each such Holder’s consent to the terms of this Amendment is evidenced by its signature hereto.
(c) OLS hereby represents and warrants that the execution and effectiveness of this Amendment shall not materially affect it, in its capacity as the Subservicer under any of the Designated Servicing Agreements or any of the Transaction Documents.
Section 4. Expenses. The Receivables Seller hereby agrees that in addition to any costs otherwise required to be paid pursuant to the Transaction Documents, the Receivables Seller shall be responsible for the payments of the reasonable and documented legal fees and out-of-pocket expenses of legal counsel to the Administrative Agent, the Noteholders, the Owner Trustee and the Indenture Trustee incurred in connection with the consummation of this Amendment and all other documents executed or delivered in connection therewith.
Section 5. Representations; Ratifications Covenants: (a) In order to induce the Noteholders and the Administrative Agent to execute and deliver this Amendment, the Issuer, HLSS, OLS and Servicer hereby represent and warrant to the Noteholders and the Administrative Agent that as of the date hereof, the Issuer, HLSS, OLS and Servicer are in full compliance with all of the terms and conditions of the Indenture and the other Transaction Documents and no Default or Event of Default has occurred and is continuing under the Indenture or any other Transaction Documents.
(b) The parties hereto ratify all terms of the existing Indenture other than those amended hereby, and ratify those provisions as amended hereby.
Section 6. Entire Agreement. The Indenture and the Indenture Supplement, as amended by this Amendment, constitute the entire agreement among the parties hereto with respect to the subject matter hereof, and fully supersedes any prior or contemporaneous agreements relating to such subject matter.
Section 7. Successors and Assigns. This Amendment shall be binding upon the parties hereto and their respective successors and assigns.
Section 8. Section Headings. The various headings and sub-headings of this Amendment are inserted for convenience only and shall not affect the meaning or interpretation of this Amendment or the Indenture or any provision hereof or thereof.
Section 9. GOVERNING LAW. THIS AMENDMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO OR IN CONNECTION WITH THIS AMENDMENT, THE RELATIONSHIP OF THE PARTIES HERETO, AND/OR THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES HERETO SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO THE CONFLICT OF LAW PROVISIONS THEREOF OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW) AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 10. Recitals. The statements contained in the recitals to this Amendment shall be taken as the statements of the Issuer, and the Indenture Trustee (in each capacity) assumes no responsibility for their correctness. The Indenture Trustee makes no representation as to the validity or sufficiency of this Amendment (except as may be made with respect to the validity of its own obligations hereunder). In entering into this Amendment, the Indenture Trustee shall be entitled to the benefit of every provision of the Indenture and the Indenture Supplement relating to the conduct of or affecting the liability of or affording protection to the Indenture Trustee.
Section 11. Owner Trustee Limitation of Liability. It is expressly understood and agreed by the parties hereto that (a) this Amendment is executed and delivered by Wilmington Trust Company, not individually or personally, but solely as Owner Trustee of the Issuer under the Trust Agreement, in the exercise of the powers and authority conferred and vested in it, (b) each of the representations, undertakings and agreements herein made on the part of the Issuer is made and intended not as a personal representation, undertaking and agreement by Wilmington Trust Company but is made and intended for the purpose of binding only the Issuer, (c) nothing herein contained shall be construed as creating any liability on Wilmington Trust Company, individually or personally, to perform any covenant either expressed or implied contained herein, all such liability, if any, being expressly waived by the parties hereto and by any Person claiming by, through or under the parties hereto and (d) under no circumstances shall Wilmington Trust Company be personally liable for the payment of any indebtedness or expenses of the Issuer or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Issuer under this Amendment.
Section 12. Counterparts. This Amendment may be executed in one or more counterparts and by the different parties hereto on separate counterparts, including without limitation counterparts transmitted by facsimile, each of which, when so executed, shall be deemed to be an original and such counterparts, together, shall constitute one and the same agreement.
[signature pages follow]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written.
HLSS SERVICER ADVANCE RECEIVABLES TRUST, as Issuer
By: Wilmington Trust Company, not in its individual capacity but solely as Owner Trustee
Amendment No. 4 to Series 2012-VF3 Second A&R Indenture Supplement
DEUTSCHE BANK NATIONAL TRUST COMPANY, as Indenture Trustee, Calculation Agent, Paying Agent and Securities Intermediary and not in its individual capacity
Amendment No. 4 to Series 2012-VF3 Second A&R Indenture Supplement
HLSS HOLDINGS, LLC, as Administrator and as Servicer (on and after the MSR Transfer Date)
Amendment No. 4 to Series 2012-VF3 Second A&R Indenture Supplement
OCWEN LOAN SERVICING, LLC, as a Subservicer and as Servicer (prior to the MSR Transfer Date)
Amendment No. 4 to Series 2012-VF3 Second A&R Indenture Supplement
CREDIT SUISSE AG, NEW YORK BRANCH, as Administrative Agent
Amendment No. 4 to Series 2012-VF3 Second A&R Indenture Supplement
CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as Committed Purchaser and
as Holder of the HLSS Servicer Advance Receivables Trust, Advance Receivables Backed Notes, Series 2012-VF3 Class A-VF3 Variable Funding Notes, the Class B-VF3 Variable Funding Notes, the Class C-VF3 Variable Funding Notes and the Class D-VF3 Variable Funding Notes
By:
Name:
Title:
By:
Name:
Title:
Amendment No. 4 to Series 2012-VF3 Second A&R Indenture Supplement
ALPINE SECURITIZATION CORP., as Conduit Purchaser and as Holder of the HLSS Servicer Advance Receivables Trust, Advance Receivables Backed Notes, Series 2012-VF3 Class A-VF3 Variable Funding Notes, the Class B-VF3 Variable Funding Notes, the Class C-VF3 Variable Funding Notes and the Class D-VF3 Variable Funding Notes
By: CREDIT SUISSE AG, NEW YORK BRANCH, as its attorney-in-fact
By:
Name:
Title:
By:
Name:
Title:
Amendment No. 4 to Series 2012-VF3 Second A&R Indenture Supplement
FOR IMMEDIATE RELEASE FOR FURTHER INFORMATION CONTACT:
James E. Lauter
Senior Vice President &
Chief Financial Officer
T: +1 345-815-3932
E: James.Lauter@hlss.com
Home Loan Servicing Solutions, Ltd. Reports EPS of $0.76 and Net Income of $54.1 Million in the Second Quarter of 2014 and Declares Monthly Dividend of $0.16 per Share
George Town, Grand Cayman, July 17, 2014 (GLOBE NEWSWIRE) – Home Loan Servicing Solutions, Ltd. ("HLSS", “our”, “we” or the "Company") (NASDAQ: HLSS) today reported net income of $54.1 million, or $0.76 per ordinary share, for the second quarter of 2014. Additionally, the Company’s Board of Directors today declared monthly dividends of $0.16 per ordinary share for July, August and September 2014.
Second quarter business performance highlights:
| |
• | Earned $41.4 million, or $0.58 per ordinary share, after adjusting for the increase in the fair value of our MSR assets of $12.7 million, or $0.18 per ordinary share. The increase in the annualized prepayment speed to 10.9 percent reduced earnings by $0.02 per ordinary share relative to first quarter earnings. |
| |
• | Issued $400 million of unrated four-year term notes secured by servicing advance receivables at a weighted average fixed interest rate of 2.88%. |
| |
• | Acquired re-performing whole loans with an aggregate UPB of $396.9 million from a large bank. The purchase price for these loans was $276.3 million. |
| |
• | Borrowed $219.5 million on a new $290.0 million mortgage loan facility to finance the re-performing loan purchase. |
Subsequent to the end of the second quarter of 2014:
| |
• | On July 16, 2014, entered into agreements to extend the maturity of our variable funding notes with an aggregate borrowing capacity of $2.1 billion to August 28, 2015. |
| |
• | On July 17, 2014, declared monthly dividends of $0.16 per ordinary share for each of the months of July, August and September 2014. |
“After adjusting for the revaluation of our MSR assets, earnings were close to the high-end of our expectations as prepayment speeds increased only modestly from the record low last quarter. This increase was due to the predicted recovery in the rate of liquidations on seriously delinquent loans” said President and CEO John Van Vlack. “Earnings stability will benefit from the issuance of four-year fixed rate term notes and from the reinvestment of cash generated in excess of our dividend in the purchase of re-performing loans.”
“As an asset class, I expect re-performing loans to provide an attractive risk-adjusted yield based on the Company’s experience with modified loans in our existing servicing portfolio” said Chairman William Erbey. “The strategic fit of re-performing loans is enhanced as the income generated from the prepayment of loans purchased at a discount offers a hedge against prepayments in HLSS’ existing non-agency MSRs.”
For more information on prior releases and SEC Filings, please refer to the “Shareholders” section of our website at www.hlss.com.
HLSS is an internally-managed owner of residential mortgage assets with historically stable valuations and cash flows. HLSS’ largest asset is mortgage servicing advances that, along with the related servicing rights, are over-collateralized more than 25 times by the underlying residential real estate. HLSS' objective is to generate stable, recurring fee-based earnings and dividends throughout the economic cycle. For more information, visit www.hlss.com.
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this press release, including, without limitation, statements we make about our business model, dividend, future earnings, financing, market opportunities, asset performance, asset valuation, business strategy and
expectations and objectives for our future performance, are forward-looking statements. These forward-looking statements include declarations regarding our management’s beliefs and current expectations. All forward-looking statements are subject to certain risks, uncertainties and assumptions. If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, our actual results, performance or achievements could differ materially from those expressed in, or implied by, any such forward-looking statements. Important factors that could cause or contribute to such difference include those risks specific to our business detailed within our reports and filings with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2013, filed with the SEC on February 6, 2014 (the "2013 Form 10-K") and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 (the “Q2 Form 10-Q”). You should not place undue reliance on such forward-looking statements, which speak only as of their dates. We undertake no obligation to update or revise forward-looking statements¸ whether as a result of new information, future events or otherwise. You should carefully consider the risk factors described under the heading “Risk Factors” within our 2013 Form 10-K and our Q2 Form 10-Q.
The following table presents our consolidated results of operations in accordance with U.S. GAAP (“GAAP”) reconciled to our internally reported financial results. Accordingly, adjustments are made to reflect Servicing fee revenue, Servicing expense and Amortization expense on a gross rather than a net basis.
Our income from operations as presented in our Management Reporting format shown below should be considered in addition to, and not as a substitute for, income from operations determined in accordance with GAAP.
|
| | | | | | | | | | | | |
For the three months ended June 30, 2014: | | Condensed Consolidated Results (GAAP) | | Adjustments | | Management Reporting (Non-GAAP) |
| | | | | | |
Revenue | | | | | | |
| | | | | | |
Servicing fee revenue | | $ | — |
| | $ | 185,690 |
| | $ | 185,690 |
|
Interest income - notes receivable – Rights to MSRs | | 89,969 |
| | (89,969 | ) | | — |
|
Interest income – other | | 7,790 |
| | — |
| | 7,790 |
|
Related party revenue (1) | | 773 |
| | — |
| | 773 |
|
Total revenue | | 98,532 |
| | 95,721 |
| | 194,253 |
|
| | | | | | |
Operating expenses | | | | | | |
| | | | | | |
Compensation and benefits | | 2,031 |
| | — |
| | 2,031 |
|
Servicing expense | | — |
| | 90,901 |
| | 90,901 |
|
Amortization of MSRs | | — |
| | 17,535 |
| | 17,535 |
|
Change in fair value of Notes receivable – Rights to MSRs | | — |
| | (12,715 | ) | | (12,715 | ) |
Related party expenses (2) | | 496 |
| | — |
| | 496 |
|
General and administrative expenses | | 1,949 |
| | — |
| | 1,949 |
|
Total operating expenses | | 4,476 |
| | 95,721 |
| | 100,197 |
|
| | | | | | |
Income from operations | | $ | 94,056 |
| | $ | — |
| | $ | 94,056 |
|
| | | | | | |
(1) Revenue earned as part of our Professional Services Agreement with Ocwen Financial Corporation (together with its subsidiaries, collectively "Ocwen").
(2) Expenses incurred as part of our Professional Services Agreement and Administrative Services Agreement with Ocwen and Altisource Portfolio Solutions, S.A., respectively.
HOME LOAN SERVICING SOLUTIONS, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except share data)
(UNAUDITED)
|
| | | | | | | | | | | | | | | | |
| | Three months | | Six months |
For the periods ended June 30, | | 2014 | | 2013 | | 2014 | | 2013 |
Revenue | | | | | | | | |
Interest income – notes receivable – Rights to MSRs | | $ | 89,969 |
| | $ | 49,852 |
| | $ | 171,821 |
| | $ | 94,422 |
|
Interest income – other | | 7,790 |
| | 97 |
| | 10,750 |
| | 199 |
|
Total interest income | | 97,759 |
| | 49,949 |
| | 182,571 |
| | 94,621 |
|
Related party revenue | | 773 |
| | 560 |
| | 1,401 |
| | 967 |
|
Total revenue | | 98,532 |
| | 50,509 |
| | 183,972 |
| | 95,588 |
|
| | | | | | | | |
Operating expenses | | | | | | | | |
Compensation and benefits | | 2,031 |
| | 1,602 |
| | 3,765 |
| | 2,768 |
|
Related party expenses | | 496 |
| | 226 |
| | 868 |
| | 452 |
|
General and administrative expenses | | 1,949 |
| | 734 |
| | 4,098 |
| | 1,379 |
|
Total operating expenses | | 4,476 |
| | 2,562 |
| | 8,731 |
| | 4,599 |
|
| | | | | | | | |
Income from operations | | 94,056 |
| | 47,947 |
| | 175,241 |
| | 90,989 |
|
| | | | | | | | |
Other expense | | | | | | | | |
Interest expense | | 40,001 |
| | 20,034 |
| | 77,512 |
| | 38,276 |
|
Other expense | | 40,001 |
| | 20,034 |
| | 77,512 |
| | 38,276 |
|
| | | | | | | | |
Income before income taxes | | 54,055 |
| | 27,913 |
| | 97,729 |
| | 52,713 |
|
Income tax expense | | — |
| | 27 |
| | — |
| | 39 |
|
Net income | | $ | 54,055 |
| | $ | 27,886 |
| | $ | 97,729 |
| | $ | 52,674 |
|
| | | | | | | | |
Earnings per share | | | | | | | | |
Basic | | $ | 0.76 |
| | $ | 0.48 |
| | $ | 1.38 |
| | $ | 0.92 |
|
| | | | | | | | |
Diluted | | $ | 0.76 |
| | $ | 0.48 |
| | $ | 1.38 |
| | $ | 0.92 |
|
| | | | | | | | |
Weighted average ordinary shares outstanding | | | | | | | | |
Basic | | 71,016,771 |
| | 57,633,399 |
| | 71,016,771 |
| | 57,133,888 |
|
Diluted | | 71,016,771 |
| | 57,633,399 |
| | 71,016,771 |
| | 57,133,888 |
|
| | | | | | | | |
Dividends declared per share | | $ | 0.48 |
| | $ | 0.42 |
| | $ | 0.93 |
| | $ | 0.80 |
|
| | | | | | | | |
HOME LOAN SERVICING SOLUTIONS, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share data)
(UNAUDITED)
|
| | | | | | | | |
| | June 30, 2014 | | December 31, 2013 |
Assets | | | | |
Cash and cash equivalents | | $ | 89,418 |
| | $ | 87,896 |
|
Match funded advances | | 6,133,758 |
| | 6,387,781 |
|
Notes receivable – Rights to MSRs | | 629,579 |
| | 651,060 |
|
Loans held for investment | | 802,091 |
| | — |
|
Related party receivables | | 17,054 |
| | 70,049 |
|
Deferred tax assets | | 1,024 |
| | 1,024 |
|
Other assets | | 261,579 |
| | 130,153 |
|
Total assets | | 7,934,503 |
| | 7,327,963 |
|
| | | | |
Liabilities and Equity | | | | |
Liabilities | | | | |
Match funded liabilities | | 5,593,927 |
| | 5,715,622 |
|
Other borrowings | | 1,049,728 |
| | 343,386 |
|
Dividends payable | | 11,363 |
| | 10,653 |
|
Income taxes payable | | 600 |
| | 682 |
|
Deferred tax liabilities | | 578 |
| | 1,266 |
|
Related party payables | | 2,990 |
| | 10,732 |
|
Other liabilities | | 11,147 |
| | 11,884 |
|
Total liabilities | | 6,670,333 |
| | 6,094,225 |
|
| | | | |
Equity | | | | |
Equity – Ordinary shares, $.01 par value; 200,000,000 shares authorized; 71,016,771 and 71,016,771 shares issued and outstanding at June 30, 2014 and December 31, 2013, respectively | | 710 |
| | 710 |
|
Additional paid-in capital | | 1,210,121 |
| | 1,210,057 |
|
Retained earnings | | 52,488 |
| | 20,804 |
|
Accumulated other comprehensive income, net of tax | | 851 |
| | 2,167 |
|
Total equity | | 1,264,170 |
| | 1,233,738 |
|
| | | | |
Total liabilities and equity | | $ | 7,934,503 |
| | $ | 7,327,963 |
|
| | | | |
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