Freedom Mortgage announces final exchange, consents results

By William Gullotti

Buffalo, N.Y., July 27 – Freedom Mortgage Corp. announced the final results relating to exchange offers, including the concurrent consents, for two series of notes in a press release on Thursday.

Final results, pricing

As previously reported, noteholders were invited to exchange their existing notes for new notes with the same coupons and the same maturity dates on a one-to-one basis, but pursuant to new indentures.

As of the offer expiration, holders tendered for exchange:

• $501,329,000, or 98.39%, of the $509,525,000 outstanding 7 5/8% senior notes due May 1, 2026 (Cusips: 35640YAF4, U31333AD6); and

• $535,107,000, or 99.05%, of the $540,246,000 outstanding 6 5/8% senior notes due Jan. 15, 2027 (Cusips: 35640YAG2, U31333AE4).

There was no change in the tendered amount of 2026 notes between the early expiration and the offer expiration. The 2027 notes only had an additional $26,000 aggregate principal amount, representing approximately 0.01% of the outstanding amount, tendered after the early expiration date.

As previously reported, the equal amount of old notes-to-new notes considerations include $50 principal amount of new notes for each $1,000 of notes as early tender premiums. The full exchange offer is available, as an amendment to the offer, through the final deadline. Initially, the full amount was not payable to noteholders who tendered their notes for exchange after the early deadline.

Consents

As previously reported, the company received the requisite consents in its consent solicitations for the notes, as exchanging noteholders were deemed to deliver consent in the related consent solicitations, by the early consent deadline.

As exchange considerations, in addition to the like amount of notes, early tendering noteholders will receive a $20 cash consideration as a consent payment for each $1,000 note.

Noteholders could not deliver consent without exchanging their notes.

The consent solicitation eliminated certain of the covenants, restrictive provisions, events of default and the requirement for subsidiaries to provide guarantees in the future from the existing senior notes indentures.

Freedom Mortgage and the trustees under the existing senior notes indentures entered into supplemental indentures.

Each supplemental indenture became effective upon execution, and the proposed amendments shall become operative upon the consummation of the applicable exchange offer on the settlement date.

Reorganization

Freedom Mortgage will be reorganizing its corporate structure, transferring all equity interest to Freedom Mortgage Holdings LLC.

After giving effect to the reorganization, neither Freedom Mortgage Parent LLC nor Freedom Mortgage Holdings LLC will have any operations or assets independent of their ownership of their subsidiaries.

The new notes will be initially issued by Freedom Mortgage Corp. but will transition to Freedom Mortgage Holdings.

Details

Settlement is expected on July 28, although the company may choose to postpone settlement to July 31.

The offer was only open to Rule 144A investors and persons who qualify under Rule 902.

The lead left dealer manager and solicitation agent is J.P. Morgan Securities LLC (212 834-4087, 866 834-4666).

D.F. King & Co., Inc. is the information and exchange agent for the offer (888 628-1041, 212 269-5550, freedommortgage@dfking.com).

Freedom Mortgage is a Mount Laurel, N.J.-based mortgage lender.

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