Item 1.01.
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Entry into a Material Definitive Agreement.
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Ditech Facility
As previously disclosed, Walter Investment Management Corp. (WIMC or the Company) entered into a commitment letter (the
Commitment Letter) with Barclays Bank PLC (Barclays), pursuant to which, among other things, Barclays agreed to increase the financing available to the Company under that certain Amended and Restated Master Repurchase
Agreement, dated as of April 23, 2015 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the Ditech Facility), among Barclays, as purchaser and agent, and Ditech Financial LLC, an indirect
wholly-owned subsidiary of the Company (Ditech Financial), as seller.
On October 2, 2017, Ditech Financial entered into Amendment
No. 7 (the Amendment) to the Ditech Facility with Barclays, and amendments to related agreements, pursuant to which the financing available to the Company under the Ditech Facility was increased by $150,000,000, raising the
committed portion of the Ditech Facility from $100,000,000 to $250,000,000, and the termination date of the Ditech Facility was extended to August 25, 2018, provided that, on and after May 22, 2018, the committed portion of the Ditech
Facility will equal $150,000,000.
The Company has experienced reductions in availability under its warehouse and advance facilities, through reductions
in the Companys advance rates, changes to the terms of such facilities and otherwise, which has negatively impacted the Companys available liquidity and capital resources. The funding available pursuant to the Commitment Letter is
expected to better position the Company to ensure it has sufficient liquidity in the near-term, though no assurance can be given that the Company will be successful in maintaining adequate financing capacity with its current or prospective lenders.
GTAAFT Facility
On October 4, 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 Issuers outstanding Series
2014-VF2
variable funding notes under the GTAAFT Issuers 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 October 4, 2017 to October 3, 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 $400 million in the aggregate to $150 million in the aggregate and (iv) provide for a supplemental fee to be paid during the period
commencing on October 4, 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 October 4, 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
October 21, 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. Pursuant to the
2014-VF2
Indenture Supplement Amendment No. 2, effective October 4, 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 October 21, 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.
Pursuant 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 October 4, 2017, the GTAAFT Facility had outstanding (i) $300 million aggregate principal balance of Series
2016-T1
Term Notes (which have an expected repayment date of October 3, 2018), and (ii) Series 2014 VF2 variable funding notes with maximum funding commitments of $150 million.