Oaktree Capital Management delivered a $250 million debt investment for Ocwen Financial, a non-bank mortgage servicer and originator. Barclays and Credit Suisse acted as placement agents to Ocwen.
Ocwen intends to utilize $100 million of the proceeds to pay down and support the refinancing of its existing corporate debt. The remaining proceeds of $150 million are expected to be utilized to support continued growth in servicing and to further diversify the company’s originations channels. The transaction is subject to the refinancing of Ocwen’s existing corporate debt and certain other closing conditions.
This investment is in addition to Ocwen’s strategic relationship with Oaktree to launch an MSR asset vehicle to acquire Fannie Mae and Freddie Mac MSRs. That relationship was announced in December 2020. The combined agreements with Oaktree are expected to provide up to $463 million of capital to accelerate growth and reduce capital structure risk.
“We initiated the strategic review process in May 2020 to evaluate all options to maximize value for our shareholders. The strategic review was fulsome, robust and included potential sale and merger transactions,” Glen A. Messina, president and CEO of Ocwen Financial, said. “We ultimately determined that the investment from Oaktree is the best long-term value creation option for our shareholders. The alliance with Oaktree provides meaningful growth capital while supporting our corporate debt refinancing. We believe it enables a level of growth, EPS accretion and potential value creation that we could not achieve on a stand-alone basis. We look forward to a long-term alliance with Oaktree, a well-respected, large-scale investor experienced in the mortgage sector.”
