LoanDepot, Inc. has announced the commencement of an exchange offer and consent solicitation for its 6.500% senior notes due 2025. The company's subsidiary, LD Holdings Group LLC, is offering eligible holders the opportunity to exchange any and all outstanding 6.500% senior notes due 2025 for newly issued 8.250% senior secured notes due 2027 and a related consent solicitation.
The exchange consideration per $1,000 principal amount of old notes tendered is set at $850 in new notes and $250 in cash for those tendered at or prior to the early tender time. For those tendered after the early tender time but before the expiration time, the consideration is $850 in new notes and $200 in cash. The new notes will pay interest at a rate of 8.250% and mature on November 1, 2027. They will be guaranteed by the subsidiaries of the issuer and secured by certain assets. The covenants for the new notes will be similar to the covenants for the old notes with customary modifications for an issuance of secured notes.
In conjunction with the exchange offer, the issuer is soliciting consents to eliminate substantially all restrictive covenants and certain default provisions in the indenture governing the old notes. The consummation of the exchange offer is not subject to the receipt of the requisite consents or to any minimum amount of old notes being tendered for exchange.
Tendered old notes may be validly withdrawn at any time prior to June 3, 2024, but not thereafter. Settlement is expected to occur on or about June 24, 2024. Eligible holders that validly tender old notes at or prior to the expiration time will also be eligible to receive cash for accrued and unpaid interest on the exchanged old notes from the last interest payment date prior to the settlement date. Interest on the new notes will accrue from the settlement date.
The exchange offer and consent solicitation are being made pursuant to the offering memorandum and consent solicitation statement. The new notes will not be registered under the securities act, or any other applicable securities laws, and may only be offered and issued to qualified institutional buyers or non-U.S. persons in compliance with regulations.
The complete terms and conditions of the exchange offer and consent solicitation are described in the offering memorandum and consent solicitation statement, copies of which may be obtained by contacting the information and exchange agent. The market has reacted to these announcements by moving the company's shares -4.1% to a price of $2.0. For more information, read the company's full 8-K submission here.
