Walter Investment Seeks $1.63 Billion in Loans to Refinance Debt

Walter Investment Management Corp., a mortgage servicer, is seeking $1.63 billion in loans to refinance debt, according to a regulatory filing.

The company is offering a $1.5 billion seven-year, covenant-light loan at 3.75 percentage points more than the London interbank offered rate, according to a person with knowledge of the deal, who asked not to be identified because the terms aren’t set. The debt, which is being arranged by Credit Suisse Group AG, will have a 1 percent minimum on the lending benchmark. The company is also seeking a $125 million revolving-credit line.

The Tampa, Florida-based company, which has $2 billion of outstanding debt, is paying 4.5 percentage points more than Libor with a 1.25 percent minimum on the benchmark on a $1.7 billion first-lien loan that it obtained last year, according to data compiled by Bloomberg.

In addition to the new credit agreement, the company is also issuing $500 million of notes coming due in 2021, according to the statement. Walter Investment is rated B2 by Moody’s Investors Service and a step higher at B+ by Standard & Poor’s.

The new first-lien loan is being offered at 99 cents on the dollar, reducing proceeds for the company, and boosting yields for investors, with commitments due by Dec. 16, according to the person. Libor, the rate at which banks say they can borrow from each other, was set today at 24 basis points.

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