PennyMac Financial Services,Inc. (NYSE:PFSI) Files An 8-K Entry into a Material Definitive Agreement

PennyMac Financial Services,Inc. (NYSE:PFSI) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry Into a Material Definitive Agreement.

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Reorganization Transaction

On August2, 2018, PennyMac Financial Services,Inc., (the “Company”) entered into a Contribution Agreement and Plan of Merger (the “Reorganization Agreement”) to reorganize under a new public holding company (the “Reorganization”). The Reorganization will allow the Company, among other things, to eliminate its “Up-C” structure and to transition to a single class of common stock held by all stockholders, as opposed to the two classes of common stock, ClassA and ClassB, that are currently authorized, issued and outstanding today. On August2, 2018, the Company’s board of directors approved the Reorganization Agreement.

The parties to the Reorganization Agreement are: the Company; New PennyMac Financial Services,Inc., a Delaware corporation and a direct, wholly-owned subsidiary of the Company (“New PennyMac”); New PennyMac Merger Sub, LLC, a Delaware limited liability company and a direct, wholly-owned subsidiary of New PennyMac (“Merger Sub”); certain contributors listed on ExhibitA of the Reorganization Agreement (the “Contributors”); and Private National Mortgage Acceptance Company, LLC, a Delaware limited liability company (“PNMAC”). The Contributors are comprised of all of the holders of Class B common stock of the Company and holders of Class A units of PNMAC (other than Class A units held by the Company). Certain Contributors are also directors and officers of the Company, and certain Contributors are beneficial owners of 5% or more of the Class A common stock.

to the Reorganization Agreement, (i)Merger Sub will merge with and into the Company, with the Company surviving the merger as a wholly-owned subsidiary of New PennyMac (the “Merger”), and (ii)the Contributors will exchange all of their ClassA units of PNMAC on a one-for-one basis for shares of common stock of New PennyMac.

In connection with the Merger:

· Each outstanding share of ClassA common stock of the Company will be converted on a one-for-one basis into shares of New PennyMac common stock.

· Each outstanding share of ClassB common stock of the Company will be cancelled for no consideration.

· Each ClassA unit of PNMAC held by a Contributor will be contributed to New PennyMac and exchanged on a one-for-one basis for shares of New PennyMac common stock.

· New PennyMac will assume the Company’s existing equity incentive plan—including all performance share awards, restricted share awards, restricted stock units and other incentive awards covering shares of the Company’s ClassA common stock, whether vested or not vested, that are outstanding at the effective time of the Merger. Further, New PennyMac will reserve the same number of shares of its common stock as reserved under the Company’s existing equity incentive plan prior to the effective time of the Merger, and the terms and conditions that are in effect immediately prior to the Merger under each outstanding incentive award assumed by New PennyMac will continue in full force and effect after the Merger, except that the shares of ClassA common stock reserved under the Company’s plans and issuable under each such award will be replaced by shares of common stock of New PennyMac.

· The Company’s current directors and executive officers will hold the same positions with New PennyMac after the Reorganization.

· New PennyMac intends to apply to have its shares of common stock listed on the New York Stock Exchange under the ticker symbol “PFSI” which is the Company’s current trading symbol.

After completion of the Reorganization, New PennyMac will replace the Company as the publicly-held entity and, through its subsidiaries, will conduct all of the operations currently conducted by the Company. The Reorganization is intended to be treated as an integrated transaction that qualifies as a reorganization within the meaning of Section368(a)of the Internal Revenue Code of 1986, as amended (the “Code”) and/or a transfer described in Section351(a)of the Code.

The Reorganization is subject to specified conditions in the Reorganization Agreement, including approval by holders of the Company’s ClassA and ClassB common stock, voting together as a single class, at a special meeting of stockholders (the “Special Meeting”). There is no existing arrangement or agreement with respect to the voting of any holder’s shares in connection with the Special Meeting. The date, time and place of the Special Meeting will be announced by Company at a later time. For more information on the Reorganization, please refer to the Registration Statement on FormS-4, filed on August2, 2018 (the “FormS-4”), as amended, by New PennyMac with the SEC.

The Reorganization Agreement may be terminated and the transactions contemplated thereby may be abandoned at any time prior to the effective time of the Reorganization (even after approval by the Company’s stockholders) by (i) action of the Company’s board of directors if the board determines that, for any reason, the completion of the transactions provided for in the Reorganization Agreement would be inadvisable or not in the best interests of the Company or its stockholders or (ii) written notice between the Company, New PennyMac, Merger Sub and PNMAC on the one hand and certain Contributors on the other hand—if the Reorganization has not occurred nine months after the date of the Reorganization Agreement.

The foregoing description of the Reorganization Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Reorganization Agreement, a copy of which was filed as Exhibit2.1 to the FormS-4 and is incorporated by reference herein.

Item 1.01. Regulation FD Disclosure.

On August2, 2018, the Company made available on its corporate website the information furnished herewith as Exhibit99.1 hereto, which discusses the Reorganization. The information included in Exhibit99.1 hereto is incorporated by reference in response to this Item 1.01.

The information in Item 1.01 of this report, including the exhibits hereto, shall not be deemed “filed” for purposes of Section18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of Section18, nor shall it be deemed incorporated by reference into any disclosure document relating to the Company, except to the extent, if any, expressly set forth by specific reference in such filing.

Item 1.01. Financial Statements and Exhibits.


Exhibit No.



Contribution Agreement and Plan of Merger, dated August2, 2018, by and among PennyMac Financial Services,Inc., New PennyMac Financial Services,Inc., New PennyMac Merger Sub, LLC, certain contributors, and Private National Mortgage Acceptance Company, LLC (incorporated by reference to Exhibit2.1 to New PennyMac’s Registration Statement on FormS-4 filed with the SEC on August2, 2018).


Slide Presentation relating to the Reorganization.

Forward-Looking Statements

This Form8-K contains forward-looking statements. The Company has identified some of these forward-looking statements with words such as “anticipates,” “believes,” “expects,” “estimates,” “is likely,” “predicts,” “projects,” “forecasts,” “objectives,” “may,” “will,” “should,” “plans” and “intends” and the negative of these words or other comparable terminology. These forward-looking statements include statements relating to status of the Reorganization and its process. In addition, the Company may from time to time make forward-looking statements in its annual report, quarterly reports and other filings with the SEC, news releases and other written and oral communications. These forward-looking statements are based on the Company’s expectations and assumptions, as of the date such statements are made, regarding its future operating performance and financial condition, including the proposal to reorganize under a new holding company, the future financial and operating performance of each party to the Reorganization, strategic and competitive advantages of each such party, the leadership of each such party, and future opportunities for each such party, as well as the economy and other future events or circumstances. The Company’s expectations and assumptions include, without limitation, risks and uncertainties associated with the following: the possibility that the Reorganization will not be consummated within the anticipated time period or at all, including as the result of the failure to obtain stockholder approval of the Reorganization; the potential for disruption to the Company’s business in connection with the Reorganization; the potential that the Company does not realize all of the expected benefits of the proposed Reorganization. Various risks and uncertainties may cause actual results to differ materially from those stated, projected or implied by any forward looking statements, including, without limitation, risks and uncertainties affecting the Company that are described in its most recent Form10-K (including in Item 1A. Risk Factors) filed with the SEC on March9, 2018, which is available on the Company’s website at or on the SEC’s website at The Company believes its expectations and assumptions are reasonable, but there can be no assurance that the expectations reflected herein will be achieved. Unless legally required, the Company undertakes no obligation to update any forward-looking statements made herein.


The FormS-4 relating to the shares of common stock of New PennyMac has been filed with the SEC but has not yet become effective. These securities may not be sold nor may offers to buy these securities be accepted before the time the FormS-4 becomes effective. This Form8-K will not constitute an offer to sell or a solicitation of an offer to buy shares of common stock of New PennyMac, and will not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of that jurisdiction.

Additional Information and Where to Find It

In connection with the Reorganization, New PennyMac filed the FormS-4 with the SEC, which has not yet become effective, that includes the Company’s proxy statement that also constitutes a prospectus of New PennyMac. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS, AND ANY OTHER RELEVANT DOCUMENTS WHEN THEY BECOME AVAILABLE, BECAUSE THEY CONTAIN, OR WILL CONTAIN,IMPORTANT INFORMATION ABOUT THE COMPANY, NEW PENNYMAC AND THE REORGANIZATION. A definitive proxy statement will be sent to the Company’s stockholders seeking approval of the Reorganization after the FormS-4 is declared effective. The proxy statement/prospectus and other documents relating to the Reorganization may be obtained free of charge from the SEC’s website at

Participants in Solicitation

This communication is not a solicitation of a proxy from any investor or stockholder. However, the Company, New PennyMac and certain of their directors and executive officers may be deemed to be participants in the solicitation of proxies in connection with the Reorganization under the rulesof the SEC. Information regarding the Company’s directors and executive officers may be found in its definitive proxy statement relating to its 2018 Annual Meeting of Stockholders filed with the SEC on April17, 2018 and in the proxy statement/prospectus included in the FormS-4. Information regarding New PennyMac’s directors and executive officers may be found in the proxy statement/prospectus included in the FormS-4. These documents may be obtained free of charge from the SEC’s website at

EX-99.1 2 a18-18013_2ex99d1.htm EX-99.1 Exhibit 99.1   Filed by PennyMac Financial Services,…
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About PennyMac Financial Services,Inc. (NYSE:PFSI)

PennyMac Financial Services, Inc. (PFSI) is a financial services company. The Company is focused on the production and servicing of the United States residential mortgage loans and the management of investments related to the United States mortgage market. It operates through three segments: loan production, loan servicing and investment management. Its loan production segment is sourced through approximately two channels: correspondent production and consumer direct lending. Its loan servicing segment performs loan administration, collection and default management activities, including the collection and remittance of loan payments; response to customer inquiries; accounting for principal and interest; counseling delinquent mortgagors, and supervising foreclosures and property dispositions. Its investment management segment represents the activities of the Company’s investment manager, which include sourcing, performing diligence, bidding and closing investment asset acquisitions.

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