S&P: Walter loan B+, notes B

Standard & Poor's said it assigned a B+ rating on Walter Investment Management Corp.'s new term loan and the B rating on its $500 million senior unsecured notes due in 2021.

The agency also said it affirmed the company's B+ issuer credit rating.

The outlook remains stable.

The action follows news that Walter will issue a new $1.5 billion term loan and $500 million of senior unsecured debt, the agency said.

The company will use the net proceeds to retire $1.7 billion of its existing term loan and $300 million for recently announced mortgage servicing rights portfolio and flow-agreements purchases, S&P said, as well as for general corporate purposes.

On balance, S&P said it views the $300 million of incremental debt negatively since it will increase the company's leverage.

On the other hand, the company's balance sheet will be less encumbered following the close of these transactions, the agency said.

This improves Walter's financial flexibility since the agency said it could probably borrow some amount against these unencumbered assets in the future.

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