Fitch sees Freedom Mortgage notes at B+

Fitch Ratings said it expects to assign a B+ rating to Freedom Mortgage Corp.'s planned issuance of up to $509.5 million of new 7 5/8% senior unsecured notes due 2026 and $540.2 million of new 6 5/8% senior unsecured notes due 2027.

Freedom will issue the notes as part of an exchange offer for its outstanding 2026 and 2027 senior unsecured notes, which are rated B+, in connection with a debt liability management transaction. Consenting noteholders will agree to a par-for-par exchange, subject to the early tender date in which Freedom can elect to extend, plus a consent fee paid in cash.

“Fitch does not anticipate any impact to the company's funding and leverage profile, as the terms and conditions, including the covenants on the new senior notes will be substantially identical to the existing 2026 and 2027 notes,” the agency said in a statement.

Additionally, Freedom plans to reorganize later and the new company Freedom Mortgage Holdings LLC will become the issuer.

The outlook is negative.

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