S&P gives Freedom Mortgage Holdings B

S&P said it assigned a B issuer rating to Freedom Mortgage Holdings LLC, which was created to help with the exchange of the unsecured notes due 2026 and 2027. Freedom Holdings owns 100% of Freedom Mortgage Corp. (Freedom Corp.; collectively, Freedom) and has no other operations outside Freedom Corp. The outlook is stable.

On Dec. 1, Freedom Corp. transferred its unsecured notes to Freedom Holdings, with Freedom Corp. guaranteeing the notes on a senior unsecured basis.

S&P said it also affirmed its B issuer credit rating on Freedom Corp. and the B issue rating on the senior unsecured notes of both Freedom Holdings and Freedom Corp. The recovery rating on the senior unsecured notes remains 3, indicating meaningful recovery (50%) in a simulated default.

In a press release, the agency said, “The stable outlook reflects our expectation that in the next 12 months, Freedom will continue to have low mortgage originations while maintaining debt to EBITDA around 5x and debt to tangible equity below 1.5x.”

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