Reverse Mortgage gets more access to amended $124.5 million DIP package

By Sarah Lizee

Olympia, Wash., Dec. 9 – Reverse Mortgage Investment Trust Inc. has gained access to $34.5 million of a heavily amended proposed $124.5 million debtor-in-possession financing package, according to a second interim order filed Thursday with the U.S. Bankruptcy Court for the District of Delaware.

The company’s original DIP proposal was with parent company BNGL Holdings, LLC and existing lender Leadenhall Capital Partners LLP, which aimed to provide the liquidity needed to transfer the Ginnie Mae HECM MSR business to Longbridge Financial, LLC, and subsequently conduct an orderly winddown of the Chapter 11 cases following the transition.

But the terms of the original proposal were still subject to negotiations when the court entered into an order approving interim access to $13 million of the financing on Monday.

The company said negotiations continued at a “rigorous pace” since the first hearing and resulted in a global agreement between the original DIP lenders, amending the original proposal.

According to an amended term sheet, the proposed $124.5 million final amount is partly made up of $44.5 million in DIP notes via Leadenhall and BNGL. Following the most recent interim order, the company can now access $34.5 million of the notes. After it meets certain conditions, the company will also have access to a $10 million roll-up of prepetition debt owed to Leadenhall, which will convert on a cashless dollar-for-dollar basis into the DIP notes.

The DIP notes will bear interest at SOFR plus 800 basis points, payable in kind. They are set to mature June 6, 2023.

The rest of the financing will consist of $80 million of DIP tail advances via prepetition lender Texas Capital Bank.

The debtor has also received interim approval to access cash collateral.

The company said in court documents that it needs the immediate capital infusion and lacks sufficient funds to operate its enterprise and continue paying its debts as they come due, or to meet its obligations as a servicer.

The Bloomfield, N.J.-based reverse mortgage issuer filed Chapter 11 bankruptcy on Nov. 30 under case number 22-11225.

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