LoanDepot amends senior notes offer, increases interest rate to 8.750%

LoanDepot, Inc. has announced amendments to its exchange offer and consent solicitation for its 6.500% senior notes due 2025. The new terms of the exchange offer include an increase in the interest rate for the new notes to 8.750%, an extension of the maturity date to November 1, 2027, and a modified mix of cash consideration and new notes.

Under the amended offer, old notes tendered at or prior to the expiration time will be exchanged for a mixed consideration of $1,100 in cash and principal amount of new notes for each $1,000 principal amount of old notes. The maximum amount of cash consideration is $185 million, and all of the cash consideration will be paid to holders of old notes tendered at or prior to the expiration time, on a pro rata basis.

The exchange offer is subject to a minimum participation condition, requiring eligible holders of at least 85% ($423,087,500) of the aggregate principal amount of old notes to validly tender, and not validly withdraw, their old notes at or prior to the expiration time.

As of June 3, 2024, a total of $123,081,000 aggregate principal amount of outstanding old notes, representing approximately 24.7% of the outstanding old notes, were validly tendered and not validly withdrawn in the exchange offer. Additionally, holders representing 68% of the old notes have indicated their intent to participate in the exchange offer.

The new notes will be guaranteed by the subsidiaries of the issuer that are existing guarantors of the old notes and the issuer’s outstanding 6.125% senior notes due 2028. Mello Credit Strategies LLC will become a guarantor of the 2028 notes on an unsecured basis following the settlement of the exchange offer.

The press release emphasizes that the offer is being made pursuant to the offering memorandum and consent solicitation statement and the supplement. It also underlines that the new notes are not registered under the securities act or any other applicable securities laws, and unless so registered, may not be offered, sold, pledged, or otherwise transferred within the United States or to or for the account of any U.S. person, except pursuant to an exemption from the registration requirements.

For more detailed information on the amendments and the exchange offer, eligible holders are encouraged to read the supplement carefully. As a result of these announcements, the company's shares have moved 12.4% on the market, and are now trading at a price of $2.08. If you want to know more, read the company's complete 8-K report here.

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