Walter Investment Management Corp. (NYSE:WAC) Files An 8-K Entry into a Material Definitive Agreement


Walter Investment Management Corp. (NYSE:WAC) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.

On October18, 2017, Ditech Financial LLC (“Ditech”), a wholly-owned, indirect subsidiary of WIMC, and WIMC entered into Amendment No.3 (the “CS-Ditech Amendment”) to the Amended and Restated Master Repurchase Agreement, dated as of November18, 2016 (as amended, restated, supplemented or otherwise modified from time to time, the “Ditech Repurchase Agreement”) among Credit Suisse First Boston Mortgage Capital LLC (the “Administrative Agent”), Credit Suisse AG, acting through its Cayman Islands Branch, as committed buyer and buyer, Alpine Securitization Ltd, as buyer, Ditech, as seller and WIMC, as guarantor, and a related side letter amendment (together with the Ditech Repurchase Agreement, the “CS-Ditech Facility”), to which, among other things, the committed portion of the CS-Ditech Facility was increased from $250million to $400million, with the total capacity remaining at $500million.

The CS-Ditech Facility was also amended to provide for the following additional events of default: (i)an event of default under the RMS Repurchase Agreement; and (ii)failure to execute a margin, netting, and set-off agreement among Credit Suisse Securities (USA) LLC and the Administrative Agent (collectively, “CS”) (and with respect to CS, any Person who, directly or indirectly is in control of, or is controlled by, or is under common control with CS), Ditech, Reverse Mortgage Solutions, Inc., a wholly-owned, indirect subsidiary of WIMC (“RMS”), and RMS REO BRC, LLC, a wholly-owned subsidiary of RMS (together with RMS, the “RMS Parties”), and acknowledged by WIMC (the “Netting Agreement”), in form and substance reasonably acceptable to the Administrative Agent, on or prior to December1, 2017. The Netting Agreement is contemplated to provide for CS to have certain margin, netting and/or set-off rights with respect to property and/or funds held, pledged or otherwise owned or owing to CS in connection with obligations of Ditech and the RMS Parties under various existing or future lending, repurchase or derivative agreements entered into between or among any of CS, Ditech and/or the RMS Parties. The effect of such an arrangement may provide for, among other things, cross-collateralization between assets of Ditech and the RMS Parties.

Additionally, the Termination Date of the CS-Ditech Facility was extended from November17, 2017 to December29, 2017, upon satisfaction of the following conditions (the “Extension Conditions”): (i) no Event of Default has occurred and is continuing; and (ii)receipt by the Administrative Agent of (x)copies of duly executed and delivered RSAs, which shall not contain any material inconsistencies with the drafts provided by WIMC to the Administrative Agent on or prior to the date of the CS-Ditech Facility and (y)an amendment to the RMS Repurchase Agreement amending the events of default thereunder to include a cross-default provision relating to the Ditech Repurchase Agreement, substantially similar to the cross-default provision in the CS-Ditech Amendment. There is no guarantee that such Extension Conditions shall occur.


In addition, covenants requiring the CS-Ditech Facility to account for no more than a third of Ditech’s total committed financing capacity and requiring that Ditech maintain other master repurchase agreements with other counterparties in an amount equal to at least $500million have been removed in the amended CS-Ditech Facility. In consideration for the amendment to the CS-Ditech Facility, Ditech has agreed to pay a fee to the Administrative Agent, which fee will be fully applied against any future arrangement fees, structuring fees, commitment fees, underwriting fees, upfront fees and/or similar fees paid or payable to the Administrative Agent or any of its Affiliates (on or prior to December29, 2017) to any upsizing, refinancing or replacement of one or more warehouse facilities or other advance line of credit facilities of WIMC or any of its subsidiaries in connection with or in contemplation of the Restructuring. Furthermore, certain other economic terms were also amended to the CS-Ditech Facility Amendment.

WIMC has experienced reductions in availability under certain of its warehouse and advance facilities, through reductions in advance rates, changes to the terms of such facilities and otherwise, which has negatively impacted WIMC’s available liquidity and capital resources. The increase in funding available under the CS-Ditech Facility is expected to better position WIMC to ensure it has sufficient liquidity in the near-term, though no assurance can be given that WIMC will be successful in maintaining adequate financing capacity with its current or prospective lenders.


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.