Ocwen Financial Corporation, (NYSE:OCN)
(“Ocwen” or the “Company”), a leading financial
services holding company, today announced that its subsidiary Ocwen
Loan Servicing, LLC (“OLS”) commenced an offer to exchange (the
"Exchange Offer") all outstanding 6.625% Senior Notes due 2019 of
Ocwen (the “Existing Notes”) held by eligible holders for up to
$350 million aggregate principal amount of newly issued 8.375%
Senior Secured Second Lien Notes due 2022 of OLS (the “New Second
Lien Notes”) upon the terms and subject to the conditions set forth
in the offering memorandum dated November 1, 2016 and the related
letter of transmittal (collectively, the “Offering
Materials”). The CUSIP numbers for the Existing Notes are:
675746 AF8 (Registered), U67503 AA7 (Reg S) and 675746 AE1 (Rule
144A).
The New Second Lien Notes will be jointly and
severally guaranteed by Ocwen, Ocwen Mortgage Servicing, Inc.,
Homeward Residential Holdings, Inc., Homeward Residential, Inc. and
Automotive Capital Services, Inc. (all of which are wholly-owned
subsidiaries of Ocwen, collectively, the “Subsidiary Guarantors”
and together with Ocwen, the “Guarantors”), which are the same
entities that guarantee OLS’s senior secured term loan. 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 all of the assets of
OLS and the Guarantors that secure the senior secured term loan
(the “Collateral”). The lien on the Collateral securing the New
Second Lien Notes will be junior to the first priority lien
securing the senior secured term loan.
The Exchange Offer will expire at 11:59 p.m.,
New York City time, on November 30, 2016, unless extended (such
date and time, as the same may be extended, the “Expiration Date”).
To be eligible to receive the applicable Total Exchange
Consideration (as defined below), eligible holders must validly
tender their Existing Notes at or prior to 5:00 p.m., New York City
time, on November 15, 2016, unless extended (such date and time, as
the same may be extended, the “Early Tender Date”). Tenders of
Existing Notes may not be withdrawn after 5:00 p.m., New York City
time, on November 15, 2016, unless extended (such date and time, as
the same may be extended, the “Withdrawal Deadline”).
Upon the terms and subject to the conditions set
forth in the Offering Material, eligible holders who validly tender
and do not validly withdraw their Existing Notes on or prior to the
Early Tender Date, and whose tenders are accepted for exchange,
will receive, the Total Exchange Consideration which consists of
$950 principal amount of New Second Lien Notes for each $1,000
principal amount of Existing Notes validly tendered prior to the
Expiration Date and accepted for exchange (the “Exchange
Consideration”), plus an early tender premium equal to $50
principal amount of New Second Lien Notes for each $1,000 principal
amount of Existing Notes validly tendered and not validly withdrawn
on or prior to the Early Tender Date (the “Early Tender Premium”).
Eligible holders validly tendering their Existing Notes after the
Early Tender Date and on or prior to the Expiration Date will only
be eligible to receive the Exchange Consideration.
The settlement date for the Exchange Offer is
expected to be on the third business day following the Expiration
Date. Eligible holders of Existing Notes accepted for
exchange in the Exchange Offer will also receive a cash payment
equal to the accrued and unpaid interest in respect of such
Existing Notes from November 15, 2016 (the most recent interest
payment date for the Existing Notes prior to the settlement date)
to, but not including, the settlement date.
The Exchange Offer is being made only to holders
of the Existing Notes who have completed and returned an
eligibility form confirming that they are both (x) either (i)
“qualified institutional buyers” (“QIBs”) within the meaning of
Rule 144A under the Securities Act or (ii) not “U.S. persons” and
are outside of the United States within the meaning of Regulation S
under the Securities Act, and (y) “accredited investors” within the
meaning of Rule 501 under the Securities Act (such holders that
meet clauses (x) and (y) are “eligible holders”).
OLS’s obligation to accept Existing Notes in the
Exchange Offer is subject to a number of conditions described in
the Offering Materials, including but not limited to (i) the valid
tender, without withdrawal, of a minimum of $275 million aggregate
principal amount of Existing Notes by eligible holders as of the
Expiration Date and (ii) the requisite lenders under OLS’s senior
secured term loan agreeing to the consummation of the Exchange
Offer.
Eligible holders collectively holding
approximately $230 million aggregate principal amount of Existing
Notes (or approximately 66% of the total amount of Existing Notes
outstanding) have agreed that they will tender their Existing Notes
in the Exchange Offer.
The Exchange Offer is purely a debt-for-debt
exchange offer and none of OLS, Ocwen or any of their subsidiaries
will receive any cash proceeds from the transaction.
The complete terms and conditions of the
Exchange Offer, as well as the terms of the New Second Lien Notes,
are described in the Offering Materials, copies of which may be
obtained by contacting D.F. King & Co., Inc., the information
agent in connection with the Exchange Offer, at (212) 269-5550 or
(800) 431-9645 (toll free), by email to ocn@dfking.com, or at
www.dfking.com/ocwen.
The New Second Lien Notes have not been
registered with the Securities and Exchange Commission (the “SEC”)
under the Securities Act of 1933, as amended (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.
The Exchange Offer is not being made to holders
of Existing Notes in any jurisdiction in which the making or
acceptance thereof would not be in compliance with the securities,
blue sky or other laws of such jurisdiction. This press
release does not constitute an offer to sell, or a solicitation of
any offer to buy, any securities, nor shall there be any sale of
any securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such
jurisdiction. Eligible holders must make their own decision
as to whether to tender their Existing Notes in the Exchange Offer
and, if so, the principal amount of Existing Notes to tender.
About Ocwen Financial
Corporation
Ocwen Financial Corporation is a financial
services holding company which, through its subsidiaries,
originates and services loans. We are headquartered in West Palm
Beach, Florida, with offices throughout the United States and in
the U.S. Virgin Islands and operations in India and the
Philippines. We have been serving our customers since 1988. We may
post information that is important to investors on our
website (www.Ocwen.com).
Forward Looking Statements
This press 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. These forward-looking statements may be
identified by a reference to a future period or by the use of
forward-looking terminology.
Forward-looking statements by their nature
address matters that are, to different degrees, uncertain. Our
business has been undergoing substantial change which has magnified
such uncertainties. Readers should bear these factors in mind when
considering such statements and should not place undue reliance on
such statements. Forward-looking statements involve a number of
assumptions, risks and uncertainties that could cause actual
results to differ materially. In the past, actual results have
differed from those suggested by forward-looking statements and
this may happen again.
Important factors that could cause actual
results to differ materially from those suggested by the
forward-looking statements include, but are not limited to, the
following: our servicer and credit ratings as well as other actions
from various rating agencies, including the impact of downgrades of
our servicer and credit ratings; adverse effects on our business as
a result of regulatory investigations or settlements; reactions to
the announcement of such investigations or settlements by key
counterparties; increased regulatory scrutiny and media attention,
uncertainty related to claims, due to rumors or otherwise,
litigation and investigations brought by government agencies and
private parties regarding our servicing, foreclosure, modification
and other practices, including uncertainty related to past, present
or future investigations and settlements with state regulators, the
CFPB, State Attorneys General, the SEC, Department of Justice or
HUD and actions brought under the False Claims Act by private
parties on behalf of the United States of America regarding
incentive and other payments made by governmental entities; any
adverse developments in existing legal proceedings or the
initiation of new legal proceedings; our ability to effectively
manage our regulatory and contractual compliance obligations; our
ability to contain and reduce our operating costs, including our
ability to successfully execute on our cost improvement initiative;
the adequacy of our financial resources, including our sources of
liquidity and ability to sell, fund and recover advances, repay
borrowings and comply with debt covenants, including the financial
and other covenants contained in them; volatility in our stock
price; the characteristics of our servicing portfolio, including
prepayment speeds along with delinquency and advance rates; our
ability to successfully modify delinquent loans, manage
foreclosures and sell foreclosed properties; uncertainty related to
legislation, regulations, regulatory agency actions, government
programs and policies, industry initiatives and evolving best
servicing practices; as well as other risks detailed in Ocwen’s
reports and filings with the Securities and Exchange Commission
(SEC), including its annual report on Form 10-K for the year ended
December 31, 2015 and its current and quarterly reports since such
date. Anyone wishing to understand Ocwen’s business should review
its SEC filings. Ocwen’s forward-looking statements speak only as
of the date they are made and, we disclaim any obligation to update
or revise forward-looking statements whether as a result of new
information, future events or otherwise.
FOR FURTHER INFORMATION CONTACT:
Investors:
Stephen Swett
T: (203) 614-0141
E: shareholderrelations@ocwen.com
Media:
John Lovallo
T: (917) 612-8419
E: jlovallo@levick.com
Dan Rene
T: (202) 973-1325
E:drene@levick.com
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