pennymac financial services is the latest mortgage company to issue bonds in a tough housing market. The California-based company announced Wednesday that it intends to issue $650 million in aggregate principal amount of senior notes due in 2029.
“Proceeds from the offering will be used to repay a portion of the Company’s secured term certificates due in 2025 and for other general corporate purposes,” PennyMac said in an 8-K filing. Stated. securities and exchange commission (SEC).
Analysts see the bond issuance by mortgage companies as a sign that market conditions could improve in 2024. Lenders are raising more money to invest in their businesses, increase liquidity and increase the proportion of unsecured debt on their balance sheets.
Housing Wire reported in October. freedom mortgage and pennymac mortgage investment trust Due to high demand from investors, the company moved to raise funds by issuing bonds. Freedom, for example, raised $1.3 billion in about 24 hours, more than the $1 billion the company had expected due to oversubscribed deals.
Analysts said at the time that other companies in the industry would likely follow suit.
PennyMac Financial Services said its notes, offered in a private placement to qualified institutional investors, are “fully and unconditionally guaranteed on an unsecured senior basis.” This offer is subject to market conditions and other factors.
PennyMac’s debt-to-equity ratio at the end of September was 2.6 times, lower than its target of 3.5 times.
A total of $1.8 billion in unsecured debt, including $650 million in bonds maturing at 5.357% in October 2025, is expected to be exchanged. The company also plans to pay $650 million at 4.250% in 2029 and $500 million at 5.750% in 2031.
PennyMac notified the market this week that an arbitrator has concluded that the company must pay $155.2 million. Black Knight Claims for damages related to breach of contract.
In 2019, Black Knight accused PennyMac of copying its mortgage repayment platform MSP to create a Service Systems Environment (SSE) platform.
The arbitrator also concluded that PennyMac can keep all intellectual property and software, including SSE, “free and unrestricted in use.”
A company can amend, modify, or vacate an interim award before it is confirmed by a state court.