Ocwen Financial buys back remaining perpetual convertible preferreds

By Marisa Wong

Madison, Wis., July 14 – Ocwen Financial Corp. announced that the 62,000 outstanding shares of its series A perpetual convertible preferred stock were converted into common stock and immediately repurchased and canceled.

The company entered into an agreement with funds managed by WL Ross & Co. LLC to repurchase and cancel the preferreds on Monday, according to an 8-K filing with the Securities and Exchange Commission.

The aggregate purchase price was roughly $72.3 million. The price of about $37 per share was derived based on the 10-day volume weighted average price on July 7, according to a press release.

“This transaction is in addition to our strategy to repurchase shares of common stock roughly equivalent to our prior period earnings pursuant to our previously announced share repurchase program,” Bill Erbey, Ocwen’s executive chairman, said in the release.

“It is an effective way for us to reduce the number of shares outstanding without materially reducing our stockholders equity. Additionally, it reduces the dilution impact on our existing common shareholders and eliminates future preferred dividends.”

Ocwen is a financial services holding company based in Atlanta.

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