Reorg

Ditech Holding

Walter’s NDA With Senior Noteholders Expires Today With Option to Extend as Company Works to Bring Holders in Line With Term Loan RSA

Fri 10/13/2017 10:46 AM

A nondisclosure agreement between Walter Investment Management Corp. and its senior noteholders expires today, with an option to extend the deadline a week, Reorg has learned. Certain senior noteholders who entered into restricted talks with the company last month have been negotiating the terms of the company’s restructuring support agreement disclosed Aug. 2. Walter’s term loan holders have not terminated the RSA, according to sources, as negotiations with bondholders continue pending the renewal of the NDA.

As of Sept. 5, Walter’s lenders holding approximately 92% of outstanding term loans agreed to the terms of the RSA, according to the company’s filing. As previously reported, the Sept. 30 deadline for the company to enter into an “acceptable” restructuring support agreement with its senior noteholders was extended by 30 days from what was originally Aug. 31.

The extended date passed without a consensual agreement between Walter and its senior creditors holding at least 66.67% of the aggregate outstanding principal amount of senior notes, the amount needed to initiate the out-of-court restructuring process, sources said. In the event that a deal cannot be reached, the company and its advisors continue to work on an alternative RSA sponsored by term loan holders that contemplates an in-court process, sources add.

Walter’s $539 million in 7.875% senior notes last traded Aug. 31 at 55.5, down from 57.25 as of Aug. 22 and from 58 as of July 26, the last time they traded before the RSA agreement was posted Aug. 1, according to TRACE. The company’s term loan was quoted today at 91.25/92.25, according to a trading desk.

The company is represented by Houlihan Lokey as financial advisor and Weil Gotshal as counsel. A group of term loan holders is represented by FTI and Kirkland, while a group of senior noteholders is represented by Moelis and Milbank. Walter and its advisors did not return requests for comment. Advisors for the company’s term loan and senior noteholder advisors also did not immediately respond to the requests.

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