Walter Investment to sell $265 million convertibles due 2019 to yield 4.5%-5%, up 35%-40%

By Rebecca Melvin

New York, Oct. 15 - Walter Investment Management Corp. plans to price $265 million of convertible senior subordinated notes due 2019 in a registered deal expected to price after the market close Wednesday and talked to yield 4.5% to 5% with an initial conversion premium of 35% to 40%, according to a syndicate source.

Walter also plans to price 4.5 million shares of common stock, including a greenshoe of up to an additional 675,000 shares.

The convertible bond offering has a $25 million greenshoe.

Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC, Bank of America Merrill Lynch and Barclays are serving as joint bookrunners for the common stock offering and the convertible senior subordinated notes offering.

The offerings are not contingent on each other.

The notes are not convertible prior to May 1, 2019 except for certain circumstances.

About $95 million of proceeds from the common stock offering will be used to fund partially an acquisition of the outstanding capital stock of Reverse Mortgage Solutions Inc. Remaining proceeds will be used to enhance liquidity and growth and working capital and general corporate purposes.

Walter is a Tampa. Fla.-based asset manager and mortgage services and portfolio owner.

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