UWM Holdings Corp., the parent company of a leading US mortgage lender United Wholesale Mortgage (UWM), raised $800 million in an unsecured debt offering, a 60% increase from its first round.
The offering, aimed at qualified investors, is priced at 6.625% with senior notes due in 2030. These notes are guaranteed on an unsecured basis by UWM and share equal payment value with the company’s senior unsecured notes.
According to the documents and Securities and Exchange Commission (SEC), UWM plans to use the proceeds to pay for mortgage rights (MSR) services and general corporate purposes. The project is scheduled to close on Dec. 10, pending normal closing conditions.
As of the third quarter, UWM reported total unfunded liabilities of $2.4 billion, with a debt-to-equity ratio of 1.11. The company’s capital stood at 2.5 billion dollars, including 636 million dollars.
Fitch Ratings assigned a ‘BB-(EXP)’ rating to the notes, noting that the issuance will not materially change the profile of UWM as the proceeds are expected to refinance the secured debt.
“Fitch can upgrade the ratings by one notch if the company meets the economics of the $800 million unsecured note maturing in 2025 without further burden of assets and maintains corporate leverage at or below 1.0x,” the rating agency explained.
Several mortgage lenders, including Freedom Mortgage, loanDepot, Mr. Cooper again PennyMacthey issued the loan two years ago, using refinancing opportunities and extended terms.
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