Item 1.01 Entry into a Definitive Material Agreement
On January 27, 2020, PHH Mortgage Corporation ("PMC"), a wholly-owned subsidiary
of Ocwen Financial Corporation ("Ocwen"), entered into a Joinder and Second
Amendment Agreement (the "Amendment") among PMC (as successor by merger to Ocwen
Loan Servicing, LLC), as borrower, Ocwen and PHH Corporation, as guarantors, the
financial institutions party thereto, as lenders, and Barclays Bank PLC, as
Administrative Agent. The Amendment amends the Amended and Restated Senior
Secured Term Loan Facility Agreement dated as of December 5, 2016, as amended by
a Joinder and Amendment Agreement dated as of March 18, 2019 (as so amended, the
"SSTL"). The Amendment provides for a net prepayment of $126.1 million of the
outstanding loan amounts as of December 31, 2019 such that the facility has a
maximum size and total initial outstanding amount of $200 million. The Amendment
also (i) extends the maturity of the remaining outstanding loans under the SSTL
to May 15, 2022, (ii) provides that the loans under the SSTL will bear interest
at the one, two, three or six month Eurodollar Rate or the Base Rate (as defined
in the SSTL), at PMC's option, plus a margin of 6.00% per annum for Eurodollar
Rate loans or 5.00% per annum for Base Rate loans (increasing to a margin of
6.50% per annum for Eurodollar Rate loans or 5.50% per annum for Base Rate loans
on January 27, 2021) and (iii) provides for a prepayment premium of 2.00% until
January 27, 2022. The loans under the SSTL are subject to quarterly amortization
payments of $5 million.
The SSTL also contains financial covenants that require Ocwen to (a) maintain a
loan-to-value ratio (i.e., the ratio of total outstanding loans under the SSTL
to certain collateral and other assets) as of the last day of each fiscal
quarter of not less than 40%; (b) maintain unrestricted cash of not less than
$125 million as of the last day of each fiscal quarter and (c) maintain an
unencumbered coverage ratio (i.e., the ratio of unrestricted cash and certain
first priority perfected collateral to total outstanding loans under the SSTL)
as of the last day of any fiscal quarter ending on or before December 31, 2020
of not less than 2:1 and thereafter, not less than 2.25:1.
The foregoing description of the Amendment does not purport to be complete and
is qualified in its entirety by reference to the full text of such document, a
copy of which is attached hereto as Exhibit 10.1 and incorporated herein by
reference.
Item 7.01 Regulation FD Disclosure.
On January 27, 2020, Ocwen issued a press release announcing the closing of the
Amendment described in Item 1.01 above. The press release attached hereto as
Exhibit 99.1 is incorporated herein by reference.
The information in this Item 7.01 and the information in the related exhibit
attached hereto 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.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number Description
10.1† Joinder and Second Amendment Agreement, dated as of January 27, 2020,
to the Amended and Restated Senior Secured Term Loan Facility
Agreement
99.1 Press Release of Ocwen Financial Corporation dated January 27, 2020
† Certain schedules and exhibits have been omitted in accordance with Item
601(a)(5) of Regulation S-K. A copy of any referenced schedules will be
furnished supplementally to the Securities and Exchange Commission upon request.
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