UWM Holdings Corporation Announces Pricing of Upsized Offering of $800 Million of 6.625% Senior Notes Due 2030

Rhea-AI Summary

UWM Holdings (NYSE: UWMC) has announced the pricing of an upsized offering of $800 million in senior notes due 2030, increased from the initially announced $500 million. The notes will carry a 6.625% interest rate and will be issued at 100% of face value.

The notes will be guaranteed on a senior unsecured basis by UWM Holdings' subsidiary, United Wholesale Mortgage, and will rank equally with existing senior unsecured notes. The closing is expected on December 10, 2024. The company plans to use the proceeds to pay down outstanding amounts on United Wholesale Mortgage's MSR facilities and for general corporate purposes.

The offering is to qualified institutional buyers under Rule 144A and certain non-U.S. persons under Regulation S.

Positive

• Successfully upsized the offering from $500M to $800M, indicating strong investor demand
• Notes priced at 100% of face value, suggesting favorable market reception

Negative

• Taking on significant new debt with 6.625% interest rate
• Increased debt burden could impact financial flexibility

Insights

Financial Analyst

This $800M senior notes offering, upsized from $500M, represents a significant debt financing move by UWMC. The 6.625% interest rate is relatively competitive in the current market environment. The strategic decision to use proceeds for paying down MSR facilities is financially prudent, as it could help optimize the company's debt structure and potentially reduce overall borrowing costs. The successful upsizing indicates strong institutional investor interest, though the pricing at par value suggests neutral market sentiment. This refinancing activity could improve UWMC's financial flexibility and liquidity position, particularly important in the current challenging mortgage market environment. However, investors should note that this adds to the company's debt obligations, albeit with a reasonable 2030 maturity timeline.

Market Research Analyst

The successful placement of an upsized notes offering signals positive institutional investor confidence in UWMC's business model and credit profile. The Rule 144A offering structure, targeting qualified institutional buyers, is standard for this type of debt issuance and helps streamline the process. The timing aligns with market conditions where companies are actively managing their debt profiles ahead of potential rate changes. The decision to increase the offering size by $300M suggests strong demand and could indicate UWMC's desire to secure additional liquidity while market conditions are favorable. This move provides UWMC with enhanced financial flexibility to navigate the evolving mortgage market landscape.

PONTIAC, Mich.--(BUSINESS WIRE)-- UWM Holdings Corporation (NYSE: UWMC) (“UWMC”) announced today that its direct subsidiary, UWM Holdings, LLC (“UWM Holdings”), priced its offering of $800 million aggregate principal amount of 6.625% senior notes due 2030 (the “Notes”). The aggregate principal amount of the offering was increased from the previously announced offering size of $500 million. The Notes will be guaranteed on a senior unsecured basis by UWM Holdings’ wholly-owned subsidiary, United Wholesale Mortgage, LLC (“United Wholesale Mortgage”), and will rank pari passu in right of payment with United Wholesale Mortgage’s existing senior unsecured notes by virtue of such guarantee. UWM Holdings expects the closing of the Notes to occur on December 10, 2024, subject to customary closing conditions. The Notes will have an interest rate of 6.625% and will be issued at a price of 100% of their face value.

UWM Holdings expects to use the net proceeds from the offering to pay down outstanding amounts on United Wholesale Mortgage’s MSR facilities and for general corporate purposes.

The Notes were offered only to persons reasonably believed to be qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and to certain non-U.S. persons in transactions outside the United States in reliance on Regulation S under the Securities Act. The Notes have not been registered under the Securities Act, or the securities laws of any other jurisdiction, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable securities laws of any other jurisdiction. This press release does not and will not constitute an offer to sell any of the Notes or the solicitation of an offer to buy any of the Notes, nor shall there be any sale of the Notes in any jurisdiction in which such offer, solicitation or sale would be unlawful.

About UWMC, UWM Holdings and United Wholesale Mortgage

Headquartered in Pontiac, Michigan, UWMC is the publicly traded direct parent of UWM Holdings. United Wholesale Mortgage is the nation’s largest home mortgage lender by closed loan volume. United Wholesale Mortgage has been the largest wholesale mortgage lender in the nation by closed loan volume for nine consecutive years and is the largest purchase lender in the nation by closed loan volume. With a culture of continuous innovation of technology and enhanced client experience, United Wholesale Mortgage leads the market by building upon its proprietary and exclusively licensed technology platforms, superior service and focused partnership with the independent mortgage broker community. United Wholesale Mortgage originates primarily conforming and government loans across all 50 states and the District of Columbia.

Forward-Looking Statements

This press release includes forward-looking statements regarding the offering of the Notes and the intended use of the net proceeds. Forward-looking statements include statements identified by terms such as “expect,” “anticipate,” “believe,” “outlook,” “may,” “should,” “target” or similar terms and variations thereof. These forward-looking statements may be affected by risks and uncertainties in UWMC’s business and market conditions. UWMC wishes to caution readers that certain important factors may have affected and could in the future affect UWMC’s actual results and could cause UWMC’s actual results for subsequent periods to differ materially from those expressed in any forward-looking statement made by or on behalf of UWMC, including the risk that the offering of the Notes cannot be successfully completed. UWMC undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date hereof.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241205655704/en/

For inquiries regarding UWMC, please contact:

INVESTOR CONTACT

BLAKE KOLO

InvestorRelations@uwm.com

MEDIA CONTACT

NICOLE ROBERTS

Media@uwm.com

Source: UWM Holdings Corporation

FAQ

What is the size and interest rate of UWMC's new senior notes offering?

UWMC's new senior notes offering is sized at $800 million with a 6.625% interest rate, upsized from the initially announced $500 million.

When will UWMC's new senior notes mature?

UWMC's new senior notes will mature in 2030.

How will UWMC use the proceeds from the senior notes offering?

UWMC plans to use the proceeds to pay down outstanding amounts on United Wholesale Mortgage's MSR facilities and for general corporate purposes.

Who is eligible to purchase UWMC's new senior notes?

The notes are only offered to qualified institutional buyers under Rule 144A and certain non-U.S. persons under Regulation S.