Fitch gives Freedom Mortgage loan B+/RR4

Fitch Ratings said it assigned a B+/RR4 rating to Freedom Mortgage Corp.’s $450 million senior secured term loan maturing in 2022.

Proceeds are expected to be used for general corporate purposes, including potential strategic acquisitions of mortgage servicing rights (MSRs) and expenses incurred with such transactions.

The new term loan rating is equalized with the company’s long-term issuer default rating. The RR4 recovery rating reflects average (30%-50%) recovery prospects in a stressed scenario based on available collateral coverage from security in the servicing income and proceeds associated with the Ginnie Mae MSRs and servicer advances, as well as pledged cash collateral subject to a control agreement, Fitch explained.

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