UWM Holdings Corp., the parent company of the leading American mortgage lender United Wholesale Mortgage (UWM), has raised $800 million through an unsecured debt offering, a 60% increase over its original plan.
The offering, aimed at qualified investors, is priced at 6.625% with senior notes due 2030. These notes are guaranteed on a senior unsecured basis by UWM and share the same payment priority as the company’s existing senior unsecured notes.
According to documents at the Securities and Exchange Commission (SEC), UWM plans to use the proceeds to pay down mortgage servicing rights (MSR) facilities and for general corporate purposes. The transaction is expected to close on December 10, subject to customary closing conditions.
As of the third quarter, UWM reported total non-financing debt of $2.4 billion, with a debt-to-equity ratio of 1.11. The company’s liquidity was $2.5 billion, including $636 million in cash.
Fitch Ratings has assigned a ‘BB-(EXP)’ rating to the notes, noting that the issuance is unlikely to significantly change UWM’s leverage profile as the proceeds are expected to be used to refinance secured debt.
“Fitch could upgrade the ratings by one notch if the company economically addresses its $800 million unsecured bond due 2025 without further asset encumbrance and maintains corporate debt at or below 1.0x,” the rating agency explained.
Various mortgage providers, including Freedom Mortgage, loanDepot, Mr. Cooper And PennyMachave issued debt over the past two years, taking advantage of refinancing options and extending terms.
