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DITECH HOLDING CORP filed this Form 8-K on 02/21/2019
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Item 1.01.

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).

As previously 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 Facilities”).

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 RMS’s and Ditech Financial’s pre-petition warehouse and servicer advance facilities and are intended to fund Ditech Financial’s and RMS’s 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 Financial’s origination business pursuant to a master repurchase agreement (the “Forward Repo Agreement”), (ii) up to $1.0 billion will be available to fund RMS’s 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 Financial’s loan origination pipeline.