PennyMac, Run by Ex-Countrywide President, Files IPO Plans
PennyMac Financial Services Inc., the residential mortgage company founded by former Countrywide Financial Corp. President Stanford L. Kurland, filed for a public offering of as much as $287.5 million.
Plans to sell Class A shares in the Moorpark, California- based company and list them on the New York Stock Exchange were outlined in a regulatory filing today. The price per share and ticker symbol weren’t cited.
PennyMac, founded in 2008 with help from BlackRock Inc. and HC Partners LLC, makes and services U.S. residential mortgages and manages related investments, the company said. Holdings have included distressed home loans. The firm earned $60.4 million through the first nine months of 2012 on revenue of $157.3 million.
“The shifting investment and operational priorities of banks and other traditional mortgage lenders have created additional opportunities,” PennyMac said. Among them are “the purchase from mortgage lenders of newly originated mortgage loans that are eligible for sale and/or securitization” through a government agency.
Proceeds from the IPO will provide capital for mortgage banking and general corporate purposes, the company said.
Kurland, PennyMac’s chairman and chief executive officer, was president and chief operating officer of Countrywide until September 2006, according to the filing. He was once a candidate to succeed Angelo Mozilo as CEO of Countrywide, which the executives built into the largest U.S. home lender in part by offering subprime mortgages to people with the weakest credit.
After Kurland left, losses on faulty mortgages drove Countrywide to the brink of failure. It was bought in 2008 by Bank of America Corp., which has since absorbed more than $40 billion in related costs. Regulators and lawmakers have blamed Countrywide's lax standards for contributing to a credit bubble and housing bust that followed, and Mozilo later agreed to a record $67.5 million settlement with regulators.
PennyMac has developed processes “to address the stringent requirements of residential mortgage lending and servicing in the post-financial crisis market,” according to the filing.
Certain PennyMac officers besides Kurland worked at Countrywide, and PennyMac “cannot assure you that any existing or future investigations, litigation or negative publicity involving Countrywide Financial Corporation will not generate negative publicity or media attention for us or adversely impact us,” according to the filing.
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