Walter Investment Management Corp. (NYSE:WAC) Files An 8-K Entry into a Material Definitive AgreementItem 1.01.
On October4, 2017, Green Tree Agency Advance Funding Trust I (the “GTAAFT Issuer”), a Delaware statutory trust and a wholly-owned subsidiary of WIMC, amended the terms of the GTAAFT Issuer’s outstanding Series 2014-VF2 variable funding notes under the GTAAFT Issuer’s existing agency servicer advance master trust financing facility (the “GTAAFT Facility”) to, among other things, (i)extend the applicable “Expected Repayment Date” and revolving period for such variable funding notes from October4, 2017 to October3, 2018, (ii)decrease the interest rate margins in respect thereof, as described below, (iii)decrease the maximum permitted principal balance of the variable funding notes from $400million in the aggregate to $150million in the aggregate and (iv)provide for a supplemental fee to be paid during the period commencing on October4, 2017 and ending on the date that the Series 2014-VF2 variable funding notes are paid or redeemed in full (the “Supplemental Fee”).
In connection with the foregoing transactions, certain existing arrangements were amended as contemplated by an amendment to the amended and restated series 2014-VF2 indenture supplement to the Base Indenture (as defined below), dated as of October4, 2017, made by and among the parties to the Base Indenture (the “2014-VF2 Indenture Supplement Amendment No.2”), which amends that certain amended and restated series 2014-VF2 indenture supplement, dated as of October21, 2015, among the parties to the 2014-VF2 Indenture Supplement Amendment No.2.
Interest on the variable funding notes is payable monthly in arrears at a rate per annum generally equal to one-month LIBOR (or, in certain circumstances, the higher of (i)the prime rate and (ii)the federal funds rate plus 0.50%) plus a per annum margin. The Series 2014-VF2 funding notes were previously issued in four classes: the Class A-VF2 Notes; the Class B-VF2 Notes; the Class C-VF2 Notes; and the Class D-VF2 Notes. to the 2014-VF2 Indenture Supplement Amendment No.2, effective October4, 2017, the applicable margin for the variable funding notes was decreased from 1.85% to 1.55% for the Class A-VF2 Notes, from 2.97% to 2.67% for the Class B-VF2 Notes, from 3.47% to 3.17% for the Class C-VF2 Notes and from 3.92% to 3.62% for the Class D-VF2 Notes. In addition, the GTAAFT Issuer has agreed to pay to the holder(s) of the Series 2014-VF2 variable funding notes, monthly in arrears during the revolving period for the Series 2014-VF2 variable funding notes, the Supplemental Fee in an amount equal to (on an annualized basis) the product of (i)the difference between (a)3.75% and (b)the average weighted daily applicable margins on all classes of the Series 2014-VF2 variable funding notes outstanding during the immediately preceding interest accrual period, multiplied by (ii)the average daily outstanding variable funding note balance during the immediately preceding interest accrual period. Future draws under the variable
funding notes are subject to various conditions, including the accuracy of the representations and warranties in the variable funding note purchase agreement, as well as funding conditions under the that certain second amended and restated indenture, dated as of October21, 2015 (as amended to date, the “Base Indenture”), among the GTAAFT Issuer, Wells Fargo Bank, N.A., as indenture trustee, calculation agent, paying agent and securities intermediary, Ditech Financial, as administrator and servicer, and Barclays, as administrative agent, and the 2014-VF2 Indenture Supplement Amendment No.2.
to the Base Indenture and the applicable indenture supplements, the GTAAFT Issuer is also required to pay to the holder(s) of the outstanding notes under the GTAAFT Facility (i)a default supplemental fee in an amount equal to 3.00%per annum of the aggregate note balances from and after the occurrence of an event of default, (ii)an expected repayment date supplemental fee in an amount equal to 1.00%per annum of the aggregate note balances from and after the end of the occurrence of the applicable Expected Repayment Date for such notes and (iii)the Supplemental Fee as described above. Such fees, if any, are payable monthly in arrears.
If the Supplemental Fees remain unpaid on the applicable payment date then a facility target amortization event will occur with respect to the variable funding notes.
In addition, the revolving period for all of the term notes and all of the variable funding notes issued under the GTAAFT Facility may end and all or a portion of the notes may otherwise become due and payable prior to the applicable Expected Repayment Date upon the occurrence of an event of default and/or a target amortization event.
As of October4, 2017, the GTAAFT Facility had outstanding (i)$300million aggregate principal balance of Series 2016-T1 Term Notes (which have an expected repayment date of October3, 2018), and (ii)Series 2014 VF2 variable funding notes with maximum funding commitments of $150million.
About Walter Investment Management Corp. (NYSE:WAC)
Walter Investment Management Corp. is a diversified mortgage banking firm focused primarily on the servicing and origination of residential loans, including reverse loans. The Company operates through three segments: Servicing, Originations and Reverse Mortgage. The Servicing segment consists of operations that perform servicing for third-party credit owners of mortgage loans, as well as its own mortgage loan portfolio. The Servicing segment also includes Insurance, and Loans and Residuals businesses. The Originations segment consists of operations that originate and purchase mortgage loans that are intended for sale to third parties. The Reverse Mortgage segment consists of operations which purchases and originates home equity conversion mortgage that are securitized, but remain on the consolidated balance sheet as collateral for secured borrowings.