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Onity Group Announces Closing of $500 Million of Senior Notes Due 2029

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Onity Group (NYSE: ONIT) announced the closing of a $500 million senior notes offering with a 9.875% interest rate due 2029 through its subsidiary PHH Escrow Issuer The proceeds, along with additional cash and funds from the sale of Onity's 15% stake in MSR Asset Vehicle to Oaktree Capital Management, will be used to redeem $289 million of PHH Mortgage 's 7.875% Senior Notes and $285 million of Onity's 12.00%/13.25% Senior Second Lien Notes. The new debt structure offers nearly 300 basis points better yield, aimed at supporting growth and enhancing financial flexibility.

Onity Group (NYSE: ONIT) ha annunciato la chiusura di un'offerta di 500 milioni di dollari di obbligazioni senior con un tasso di interesse del 9,875% in scadenza nel 2029 tramite la sua controllata PHH Escrow Issuer. I proventi, insieme a ulteriore liquidità e fondi derivanti dalla vendita della partecipazione del 15% di Onity nel MSR Asset Vehicle a Oaktree Capital Management, saranno utilizzati per rimborsare 289 milioni di dollari delle 7,875% Senior Notes di PHH Mortgage e 285 milioni di dollari delle Onity's 12.00%/13.25% Senior Second Lien Notes. La nuova struttura del debito offre un rendimento quasi 300 punti base migliore, con l'obiettivo di sostenere la crescita e migliorare la flessibilità finanziaria.

Onity Group (NYSE: ONIT) anunció el cierre de una oferta de 500 millones de dólares en notas senior con una tasa de interés del 9,875% que vence en 2029 a través de su subsidiaria PHH Escrow Issuer. Los ingresos, junto con efectivo adicional y fondos de la venta del 15% de participación de Onity en el MSR Asset Vehicle a Oaktree Capital Management, se utilizarán para redimir 289 millones de dólares de las 7,875% Senior Notes de PHH Mortgage y 285 millones de dólares de las Onity's 12.00%/13.25% Senior Second Lien Notes. La nueva estructura de deuda ofrece un rendimiento casi 300 puntos base mejor, con el objetivo de apoyar el crecimiento y mejorar la flexibilidad financiera.

Onity Group (NYSE: ONIT)은 2029년 만기인 5억 달러 규모의 고급 채권 발행을 9.875%의 이자율로 종료했다고 발표했습니다. 이 자금은 PHH Escrow Issuer를 통해 이루어졌습니다. 자금의 수익금은 Onity가 Oaktree Capital Management에 MSR 자산 차량의 15% 지분을 판매하여 얻은 추가 현금 및 자금과 함께 2억 8천9백만 달러 규모의 PHH Mortgage의 7.875% 고급 노트와 2억 8천5백만 달러 규모의 Onity의 12.00%/13.25% 고급 제2 담보 노트를 상환하는 데 사용됩니다. 새로운 부채 구조는 300bp 가까운 더 나은 수익률을 제공하여 성장을 지원하고 재정적 유연성을 강화하는 것을 목표로 합니다.

Onity Group (NYSE: ONIT) a annoncé la clôture d'une émission de 500 millions de dollars de titres senior avec un taux d'intérêt de 9,875% arrivant à échéance en 2029 par l'intermédiaire de sa filiale PHH Escrow Issuer. Les produits, ainsi que des liquidités supplémentaires et des fonds provenant de la vente de la participation de 15% d'Onity dans le MSR Asset Vehicle à Oaktree Capital Management, seront utilisés pour racheter 289 millions de dollars des 7,875% Senior Notes de PHH Mortgage et 285 millions de dollars des Onity's 12.00%/13.25% Senior Second Lien Notes. La nouvelle structure de la dette offre un rendement presque 300 points de base supérieur, visant à soutenir la croissance et à améliorer la flexibilité financière.

Onity Group (NYSE: ONIT) hat den Abschluss eines Angebots für 500 Millionen Dollar an Senior Notes mit einem Zinssatz von 9,875% bis 2029 über seine Tochtergesellschaft PHH Escrow Issuer bekannt gegeben. Die Erlöse, zusammen mit zusätzlichem Bargeld und Mitteln aus dem Verkauf von Onitys 15% Beteiligung am MSR Asset Vehicle an Oaktree Capital Management, werden verwendet, um 289 Millionen Dollar der 7,875% Senior Notes von PHH Mortgage und 285 Millionen Dollar der Onity's 12,00%/13,25% Senior Second Lien Notes zurückzuzahlen. Die neue Schuldenstruktur bietet eine nahezu 300 Basispunkte bessere Rendite, um das Wachstum zu unterstützen und die finanzielle Flexibilität zu erhöhen.

Positive
  • New debt structure provides 300 basis points better yield
  • Strong investor interest indicates market confidence
  • Debt refinancing improves financial flexibility
  • Enhanced capital structure supports future growth potential
Negative
  • Taking on $500 million in new debt with 9.875% interest rate
  • Divestment of 15% ownership stake in MSR Asset Vehicle

Insights

This $500 million senior notes offering represents a significant refinancing move that strengthens Onity's financial position. The new 9.875% notes due 2029 will replace existing higher-cost debt, including $289 million of 7.875% notes and $285 million of 12.00%/13.25% notes. The 300 basis point reduction in effective yield will substantially lower interest expenses, directly improving bottom-line performance.

The successful debt restructuring, combined with strong investor interest, signals market confidence in Onity's business transformation. The transaction provides enhanced financial flexibility and improved debt maturity profile, extending to 2029. The simultaneous MAV Sale demonstrates strategic portfolio optimization, with proceeds supporting debt reduction. These moves position Onity for stronger earnings potential and improved capital allocation flexibility.

Enhances Capital Structure to Support Continued Growth and Profitability

WEST PALM BEACH, Fla., Nov. 06, 2024 (GLOBE NEWSWIRE) -- Onity Group Inc. (NYSE: ONIT) (“Onity”), a leading non-bank mortgage servicer and originator, today announced that PHH Escrow Issuer LLC (“Escrow Issuer”), a wholly-owned special purpose subsidiary of PHH Corporation (“PHH”), closed the previously announced offering of $500 million aggregate principal amount of 9.875% Senior Notes due 2029 (the “Notes”).

Glen A. Messina, Chair, President and CEO of Onity Group, said, “We have made significant progress in enhancing our capital structure through the successful completion of this debt issuance and other previously announced transactions. The strong level of investor interest, particularly from new investors, in our debt issuance is a testament to the successful transformation of our business, which is driving strong earnings, cash flow and returns. The effective yield on our new corporate debt structure is nearly 300 basis points better, which will enable our Company to grow future earnings, capture upside potential in our share price, and provide greater financial flexibility to invest in the continued growth of our business.”

The net proceeds from the sale of the Notes, together with additional cash from Onity, were placed into escrow pending the consummation of the recently announced sale by Onity of its 15% ownership interest in MSR Asset Vehicle LLC to certain funds affiliated with Oaktree Capital Management, L.P. (the “MAV Sale”) and additional customary closing conditions. Upon satisfaction of the escrow conditions, the escrowed proceeds will be released to PHH Corporation, and at that time PHH Corporation, along with Onity and certain subsidiaries of PHH, will enter into a supplement to the indenture governing the Notes pursuant to which PHH will become a co-issuer of the Notes and Onity and such subsidiaries will become guarantors of the Notes.

Upon their release from escrow, the net proceeds from the offering will be used, together with the net proceeds from the MAV Sale and cash on hand, to redeem all of PHH Mortgage Corporation’s $289 million of outstanding 7.875% Senior Notes due 2026 and all of Onity’s $285 million of outstanding 12.00%/13.25% Senior Second Lien Notes due 2027.

The Notes and the related guarantees were not and will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any other jurisdiction.

The Notes were sold only to persons reasonably believed to be qualified institutional buyers in reliance on the exemption from registration provided by Rule 144A of the Securities Act and to non-U.S. persons outside of the United States in compliance with Regulation S of the Securities Act.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any offer or sale of, any security in any jurisdiction in which such offer, solicitation or sale would be unlawful.

About Onity Group

Onity Group Inc. (NYSE: ONIT) is a leading non-bank mortgage servicer and originator providing solutions through its primary brands, PHH Mortgage and Liberty Reverse Mortgage. PHH Mortgage is one of the largest servicers in the country, focused on delivering a variety of servicing and lending programs. Liberty is one of the nation’s largest reverse mortgage lenders dedicated to education and providing loans that help customers meet their personal and financial needs. We are headquartered in West Palm Beach, Florida, with offices and operations in the United States, the U.S. Virgin Islands, India and the Philippines, and have been serving our customers since 1988.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements relating to the satisfaction of the escrow conditions, including, but not limited to, the MAV Sale, and the ultimate use of the proceeds from the Notes offering. We cannot provide any assurance that these events will occur. Forward-looking statements involve a number of assumptions, risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements, including, but not limited to, that the conditions to the release of the escrowed funds from escrow, including the consummation of the MAV Sale, may not occur. Our forward-looking statements speak only as of the date they are made and, we disclaim any obligation to update or revise forward-looking statements whether as a result of new information, future events or otherwise.

For Further Information Contact:

Dico Akseraylian, SVP, Corporate Communications

(856) 917-0066

mediarelations@onitygroup.com


FAQ

What is the size and interest rate of Onity Group's (ONIT) new senior notes offering?

Onity Group's new senior notes offering is $500 million with a 9.875% interest rate, due 2029.

How will Onity Group (ONIT) use the proceeds from the senior notes offering?

The proceeds will be used to redeem $289 million of PHH Mortgage 's 7.875% Senior Notes and $285 million of Onity's 12.00%/13.25% Senior Second Lien Notes.

What is the improvement in yield for Onity Group's (ONIT) new debt structure?

The new corporate debt structure provides nearly 300 basis points better yield compared to previous arrangements.

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