WEST PALM BEACH, Fla., Sept. 30, 2024 (GLOBE NEWSWIRE) -- Onity Group Inc. (NYSE:ONIT) ("Onity" or the "Company"), a leading non-bank mortgage servicer and originator, today announced multiple transactions to accelerate its ongoing capital restructuring plans.
Oaktree Transactions
On September 30, 2024, Onity entered into definitive agreements with funds managed by Oaktree Capital Management, L.P. ("Oaktree") to amend the agreements between the Company and Oaktree to provide for the following:
The Company will sell its 15% interest in MSR Asset Vehicle LLC ("MAV") to Oaktree for a cash payment equal to adjusted book value upon closing plus $15 million, subject to certain adjustments (the "MAV Sale"). The total cash proceeds to be received by Onity upon consummation of the sale is currently expected to be approximately $49 million.
The MAV Sale is expected to close in the fourth quarter of 2024 and is subject to certain closing adjustments and conditions, including regulatory approval, consummation of a debt financing that meets certain criteria (a "Debt Financing") to refinance all the outstanding PHH Mortgage Corporation ("PMC") 7.875% Senior Secured Notes due 2026 ("PMC Notes") and other customary conditions.
The Company will remain the exclusive subservicer of the existing MAV portfolio, which had an unpaid principal balance of $52 billion as of August 31, 2024, for an initial term of five years and will subservice the majority of new MSRs acquired by MAV. MAV will also be subject to certain restrictions on near-term MSR sales for 36 months following the closing of the MAV sale.
Oaktree will waive the make-whole premium, which is currently due in connection with any optional redemption of senior secured notes due 2027 issued by Onity (the "Onity Notes") on or prior to March 4, 2026, in connection with the redemptions described below.
The Company expects to redeem at least $150 million of Onity Notes during the fourth quarter of 2024 in accordance with the following requirements. The Company is required to redeem a principal amount of Onity Notes equal to (a) the proceeds from the MAV Sale at a redemption price equal to par plus accrued interest, and (b) the proceeds from (i) the MAM asset acquisition described below and the proceeds from any debt financing secured by the assets so acquired, (ii) the proceeds from the securitization transaction described below, and (iii) any remaining proceeds from a Debt Financing after refinancing the PMC Notes, in each case, at a redemption price equal to 102.5% plus ...
