Freedom Mortgage lifts term loan B to $450 million, trims spread

By Sara Rosenberg

New York, Feb. 16 – Freedom Mortgage Corp. upsized its five-year term loan B to $450 million from $350 million and decreased pricing to Libor plus 550 basis points from Libor plus 600 bps, according to a market source.

Also, the original issue discount on the term loan B was revised to 99 from 98, the source said.

The term loan B still has a 1% Libor floor, 101 hard call protection for one year and amortization of 2.5% per annum.

Covenants include maximum consolidated corporate debt to consolidated tangible net worth of 1.35 times with step-downs, maximum loan-to-value (LTV) ratio of 60% with step-downs to 45%, tangible net worth of $600 million, and minimum liquidity of the greater of $45 million and the Ginnie Mae liquidity requirement.

Barclays, J.P. Morgan Securities LLC and Nomura are the bookrunners on the deal.

Recommitments were scheduled to be due at 5 p.m. ET on Thursday, the source added.

Proceeds will be used for general corporate purposes, including potential strategic acquisitions of Mortgage Servicing Rights.

Freedom Mortgage is a Mount Laurel, N.J.-based top tier residential mortgage company engaged in the origination, servicing, selling and securitizing of primarily agency-eligible residential mortgage loans.

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