Entry into a Material Definitive Agreement.
As previously disclosed, on February 8, 2019, Ditech Holding Corporation (the Company) and certain of its direct and indirect subsidiaries
(collectively with the Company, the Debtors), including Ditech Financial LLC (Ditech Financial) and Reverse Mortgage Solutions, Inc. (RMS), entered into a Restructuring Support Agreement (including the
Restructuring Term Sheet attached thereto, the RSA) setting forth the principal terms of a financial restructuring of the Debtors (the Restructuring) with lenders holding, as of February 13, 2019, more than 80% of the
loans and commitments outstanding under that certain Second Amended and Restated Credit Agreement, dated as of February 9, 2018, by and among the Company, as borrower, Credit Suisse AG, as administrative agent, and the lenders party thereto (as
amended, restated, amended and restated, supplemented, or otherwise modified from time to time in accordance with the terms thereof).
disclosed, on February 8, 2019, the Company, as guarantor, along with Ditech Financial and RMS, also entered into a commitment letter (Commitment Letter) with Barclays Bank PLC (Barclays) as Administrative Agent and as
Buyer and Nomura Corporate Funding Americas, LLC as Buyer (together with Barclays, the DIP Lenders), regarding the terms of certain master warehouse refinancing facilities (collectively, as described below, the DIP
On February 11, 2019, the Debtors filed voluntary petitions (the cases commenced thereby, the Chapter 11 Cases)
under chapter 11 of title 11 of the United States Code (the Bankruptcy Code) in the United States Bankruptcy Court for the Southern District of New York (the Court) to implement the Restructuring.
On February 13, 2019, as part of the Debtors first day motions, the Court entered an interim order approving the DIP Facilities, and on
February 14, 2019, the Debtors and certain other subsidiaries of the Company entered into the DIP Facilities.
The DIP Facilities provide the Company
up to $1.9 billion in available warehouse financing. Proceeds of the DIP Facilities were used to refinance RMSs and Ditech Financials pre-petition warehouse and servicer advance facilities and
are intended to fund Ditech Financials and RMSs continued business operations during the Chapter 11 Cases, providing the necessary liquidity to the Debtors to implement the Restructuring.
Specifically, under the DIP Facilities (i) up to $650 million will be available to fund Ditech Financials origination business pursuant to a
master repurchase agreement (the Forward Repo Agreement), (ii) up to $1.0 billion will be available to fund RMSs buyouts of certain Home Equity Conversion Mortgages (HECMs) and real estate owned from Ginnie Mae
securitization pools (the Reverse Repo Agreement) and (iii) up to $250 million will be available to finance delinquency, escrow and corporate advances made by Ditech Financial in connection with its servicing of certain Fannie
Mae and private label mortgage loans, as applicable, pursuant to the Ditech Agency Advance Trust Series 2019-VF1 variable funding notes (the Agency VFN, and the related indenture supplement, the 2019-VF1 Agency Supplement) and the Ditech PLS Advance Trust II Series 2019-VF1 variable funding notes (the Private Label VFN, and the related
indenture supplement, the 2019-VF1 PLS Supplement), respectively. In addition, the lenders under the DIP Facilities have agreed to provide Ditech Financial, through the pendency of the Chapter 11
Cases, up to $1.9 billion in trading capacity for Ditech Financial to hedge its interest rate exposure with respect to the loans in Ditech Financials loan origination pipeline.