loanDepot, Inc. (NYSE: LDI) (“loanDepot”) announced today that
its subsidiary, LD Holdings Group LLC (the “Issuer”), has amended
certain terms of its previously commenced offer to exchange (the
“Exchange Offer”) any and all of its outstanding 6.500% Senior
Notes due 2025 (the “Old Notes”) for newly issued Senior Secured
Notes due 2027 (the “New Notes”), and a related consent
solicitation upon the terms and conditions set forth in the
Confidential Offering Memorandum and Consent Solicitation Statement
dated May 20, 2024 (as supplemented by Supplement No.1 (the
“Supplement”) to the Offering Memorandum and Consent Solicitation
Statement dated June 4, 2024, the “Offering Memorandum and Consent
Solicitation Statement”). Capitalized terms used but not defined
herein shall have the meanings set forth in the Offering Memorandum
and Consent Solicitation Statement.
As amended, the Exchange Offer will provide that the New Notes
will pay interest at a rate of 8.750% (an incremental 0.500% per
annum) and mature November 1, 2027. In addition, the mix of cash
consideration and New Notes that comprise the Total Consideration
as further described and illustrated below is being modified as
follows:
The Issuer’s previous offer to exchange $850 principal amount of
New Notes and $250 in cash for each $1,000 principal amount of Old
Notes tendered at or prior to the Early Tender Time, and $850
principal amount of New Notes and $200 in cash for each $1,000
principal amount of Old Notes tendered at or prior to the
Expiration Time, has been replaced by an offer to exchange a mixed
consideration of $1,100 in cash and principal amount of New Notes
for each $1,000 principal amount of Old Notes tendered at or prior
to the Expiration Time. The maximum amount of cash consideration is
$185 million and all of the cash consideration will be paid to
holders of Old Notes tendered at or prior to the Expiration Time,
on a pro rata basis. In addition to the cash consideration, holders
of Old Notes tendered at or prior to the Expiration Time will also
receive a principal amount of New Notes sufficient to cause the
Total Consideration received by such holders to be equal to $1,100
in cash and principal amount of New Notes for each $1,000 principal
amount of Old Notes tendered at or prior to the Expiration Time.
Eligible Holders that validly tender Old Notes at or prior to the
Expiration Time will also receive accrued and unpaid interest on
the exchanged Old Notes from the last interest payment date prior
to, but not including, the Settlement Date. Interest on the New
Notes will accrue from the Settlement Date.
Solely for illustrative purposes, the below table shows the
approximate Total Consideration for Old Notes Tendered at or prior
to the Expiration Time, in the event that (a) all $497,750,000 of
outstanding Old Notes are tendered at or prior to the Expiration
Time and (b) 85% (representing the Minimum Tender Condition) of the
outstanding Old Notes are tendered at or prior to the Expiration
Time.
Exchange Consideration for Old
Notes Tendered at or Prior to the Expiration Time(1)
Principal Amount of Old Notes
Tendered
per $1,000 Principal Amount of
Old Notes
Aggregate Amount
Percentage of Old Notes
Tendered
New Notes
(principal amount)
Cash
New Notes (principal
amount)
Cash
100%
$497,750,000
$728.33
$371.67
$362,525,000
$185,000,000
85%
$423,087,500
$662.74
$437.26
$280,396,250
$185,000,000
(1) All consideration amounts are
approximate amounts and do not reflect the impact of rounding in
accordance with the terms described in the Offering Memorandum and
Consent Solicitation Statement. We will not accept any tender that
would result in the issuance of less than $2,000 principal amount
of New Notes, and we will round downward to the nearest $1,000 the
amount of New Notes that would be issuable in exchange for each
tender of Old Notes.
The New Notes will be guaranteed by the subsidiaries of the
Issuer that are existing guarantors of the Old Notes and the
Issuer’s outstanding 6.125% Senior Notes due 2028 (the “2028
Notes”), as well as mello Credit Strategies LLC (“mello”), which
will become a guarantor of the 2028 Notes on an unsecured basis
following settlement of the Exchange Offer, and will be secured,
subject to permitted liens, by a first-priority security interest
on (1) a securities account to which all of the credit risk
retention securities originally issued to mello or its subsidiary
in connection with securitization financings sponsored by mello
will be credited upon the repurchase of such credit risk retention
securities from a repurchase agreement counterparty (including such
securities acquired by mello or its subsidiary following the Issue
Date, which may be subject to existing and future repurchase
agreement financings entered into in the ordinary course of
business), (2) certain unencumbered non-agency mortgage servicing
rights held by loanDepot.com, LLC, a guarantor of the New Notes,
with a fair value of up to $60.0 million, and (3) a securities
account holding $100.6 million aggregate principal amount of 2028
Senior Notes that were previously repurchased by the Issuer and to
be held by Artemis Management LLC, a guarantor of the New Notes
(collectively, the “Collateral”). The New Notes will no longer be
secured by an interest in any of the membership interests of
mello.
Other amendments to the Exchange Offer include:
- the addition of a minimum participation condition to the
Exchange Offer such that the consummation of the Exchange Offer is
conditioned (unless waived by the Issuer in its sole discretion)
upon Eligible Holders of at least 85% ($423,087,500) of the
aggregate principal amount of Old Notes validly tendering, and not
validly withdrawing, their Old Notes at or prior to the Expiration
Time (“Minimum Tender Condition”);
- modifications to certain of the negative covenants of the New
Notes that further limit the Issuer and its Restricted Subsidiaries
from (a) incurring additional Capital Markets Indebtedness secured
by a Lien, or incurring any Indebtedness (other than Permitted
Funding Indebtedness) secured by MSRs or any residual interest
therein, and (b) making Investments in or Restricted Payments to
subsidiaries that are not guarantors of the New Notes;
- a modification to the amendment provisions of the New Notes
such that the guarantees of the New Notes may not be discharged via
an amendment to the Indenture governing the New Notes without the
consent of each holder of New Notes;
- the addition of the release of the guarantees for the Old
Notes, subject to participation from at least a majority of holders
of Old Notes
- modifications to the Collateral for the New Notes as further
described above;
- adding mello as a secured Guarantor of the New Notes and, in
lieu of a pledge of the stock of mello, causing mello to pledge the
Collateral it holds, and covenanting that mello or a subsidiary
thereof will, to the extent not otherwise prohibited by applicable
law, rule or regulation, purchase and hold any credit risk
retention securities issued in connection with any future Permitted
Securitization Indebtedness; and
- extending the Withdrawal Deadline for the Exchange Offer to
5:00 p.m., New York City time, on June 7, 2024.
Eligible Holders are encouraged to read the Supplement carefully
for a more detailed description of such changes.
The Issuer was advised by the information and exchange agent for
the Exchange Offer that, as of 5:00 p.m., New York City time, on
June 3, 2024, a total of (i) $123,081,000 aggregate principal
amount of outstanding Old Notes, representing approximately 24.7%
of the outstanding Old Notes were validly tendered and not validly
withdrawn in the Exchange Offer. In addition, holders representing
68% of the Old Notes have indicated their intent (but are not
obligated) to participate in the Exchange Offer, as amended. The
Issuer reserves the right, subject to applicable law, to terminate,
withdraw or amend the Exchange Offer at any time and from time to
time, as described in the Offering Memorandum and Consent
Solicitation Statement.
The Supplement will only be distributed to Eligible Holders of
the Old Notes who properly complete and return or have completed
and returned an eligibility form confirming that they are either a
“qualified institutional buyer” as defined in Rule 144A under the
Securities Act of 1933, as amended (the “Securities Act”), or a
non-U.S. person in compliance with Regulation S under the
Securities Act (such holders, “Eligible Holders”). The complete
terms and conditions of the Exchange Offer and Consent Solicitation
are described in the Offering Memorandum and Consent Solicitation
Statement, together with the Supplement, copies of which may be
obtained by contacting Global Bondholder Services Corporation, the
information and exchange agent in connection with the Exchange
Offer and Consent Solicitation, at (855) 654-2014 (U.S. toll-free)
or (212) 430-3774 (banks and brokers). The eligibility form is
available electronically at:
https://gbsc-usa.com/eligibility/loandepot.
This press release is for informational purposes only and is
neither an offer to purchase nor a solicitation of an offer to sell
the New Notes. The Exchange Offer and Consent Solicitation is only
being made pursuant to the Offering Memorandum and Consent
Solicitation Statement and the Supplement. The Exchange Offer is
not being made to holders of Old Notes in any jurisdiction in which
the making or acceptance thereof would not be in compliance with
the securities, blue sky or other laws of such jurisdiction.
The New Notes will not be registered under the Securities Act,
or any other applicable securities laws and, unless so registered,
the New Notes may not be offered, sold, pledged or otherwise
transferred within the United States or to or for the account of
any U.S. person, except pursuant to an exemption from the
registration requirements thereof. Accordingly, the New Notes are
being offered and issued only (i) to persons reasonably believed to
be “qualified institutional buyers” (as defined in Rule 144A under
the Securities Act) and (ii) to non-“U.S. persons” who are outside
the United States (as defined in Regulation S under the Securities
Act).
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains forward-looking statements that are
based on management’s beliefs and assumptions and on information
currently available to management. Forward-looking statements
include statements that are not historical facts and can be
identified by terms such as “anticipate,” “believe,” “could,”
“estimate,” “expect,” “intend,” “may,” “plan,” “potential,”
“predict,” “project,” “seek,” “should,” “will,” “would” or similar
expressions and the negatives of those terms.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors, such as the satisfaction of the
conditions described in the Offering Memorandum and Consent
Solicitation Statement, whether holders that indicate their intent
to participate in the Exchange Offer will actually tender their Old
Notes, that may cause loanDepot’s actual results, performance or
achievements to be materially different from any future results,
performance or achievements expressed or implied by the
forward-looking statements. Given these uncertainties, you should
not place undue reliance on forward-looking statements. Also,
forward-looking statements represent management’s beliefs and
assumptions only as of the date of this press release. You should
read this press release with the understanding that loanDepot’s
actual future results may be materially different from what
loanDepot expects.
Important factors that could cause actual results to differ
materially from loanDepot’s expectations are included in the
section entitled “Risk Factors” set forth in the Offering
Memorandum and Consent Solicitation Statement and under the caption
“Risk Factors” included in loanDepot’s Annual Report on Form 10-K
for the year ended December 31, 2023, incorporated by reference
into the Offering Memorandum and Consent Solicitation Statement.
These factors should not be construed as exhaustive and should be
read in conjunction with the other cautionary statements that are
included in loanDepot’s filings. loanDepot expressly disclaims any
obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future
developments or otherwise, except as required by applicable
law.
About loanDepot
loanDepot (NYSE: LDI) is a leading provider of lending solutions
that make the American dream of homeownership more accessible and
achievable for all, especially the increasingly diverse communities
of first-time homebuyers, through a broad suite of lending and real
estate services that simplify one of life’s most complex
transactions. Since its launch in 2010, the company has been
recognized as an innovator, using its industry-leading technology
to deliver a superior customer experience. Our digital-first
approach makes it easier, faster and less stressful to purchase or
refinance a home. Today, as one of the largest non-bank lenders in
the country, loanDepot and its mellohome operating unit offer an
integrated platform of lending, loan servicing, real estate and
home services that support customers along their entire
homeownership journey. Headquartered in Southern California and
with hundreds of local market offices nationwide, loanDepot’s
passionate team is dedicated to making a positive difference in the
lives of their customers every day.
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version on businesswire.com: https://www.businesswire.com/news/home/20240604973209/en/
Investor Relations Contact: Gerhard Erdelji Senior Vice
President, Investor Relations (949) 822-4074
gerdelji@loandepot.com
Media Contact: Rebecca Anderson Senior Vice President,
Communications & Public Relations (949) 822-4024
rebeccaanderson@loandepot.com
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