WMIH plans $2.75 billion senior notes for Nationstar purchase

By Sara Rosenberg

New York, Feb. 15 – WMIH Corp. plans on issuing up to $2.75 billion of senior unsecured notes to help fund the acquisition of Nationstar Mortgage Holdings Inc. and refinance around $1.9 billion of Nationstar’s existing senior unsecured notes, according to an 8-K filed with the Securities and Exchange Commission late Wednesday.

Credit Suisse Securities (USA) LLC, Jefferies LLC, Deutsche Bank Securities Inc. and HSBC Securities (USA) Inc. are the lead banks on the debt.

The notes are backed by a commitment for a $1 billion one-year tranche A bridge loan priced at Libor plus 500 basis points, a $1 billion one-year tranche B bridge loan priced at Libor plus 550 bps and a $750 million one-year tranche C bridge loan priced at Libor plus 575 bps. Pricing on the tranches will increase by 50 bps every three months. All tranches have a 1% Libor floor.

Under the agreement, Nationstar shareholders may elect to receive $18.00 in cash or 12.7793 shares of WMIH common stock for each share of Nationstar common stock they own, subject to an overall proration to ensure that 32% of the total outstanding Nationstar shares are exchanged for the stock consideration. The aggregate consideration payable to Nationstar shareholders will consist of $1.2 billion in cash and WMIH shares currently anticipated to be valued at about $702 million.

Upon completion of the transaction, Nationstar shareholders will own about 36% of the combined company and WMIH shareholders will own around 64%.

Closing is expected in the second half of this year, subject to approval by the shareholders of both companies, regulatory approvals and other customary conditions.

WMIH is a Seattle-based reinsurance business. Nationstar is a Dallas-based non-bank mortgage servicer.

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