UWM Holdings secures $2 billion capital infusion from Oaktree and CEO

EarningsCorporate Action

โดย The Motley Fool·

Summary · why it matters

UWM Holdings Corporation announced a $2 billion capital infusion from Oaktree Capital Management and CEO Mathew Ishbia, fortifying its balance sheet after a failed acquisition of mortgage servicing rights from Two Harbors. The transaction includes a $1.5 billion investment from Oaktree and a commitment of up to $550 million from Ishbia, bringing total equity to $3 billion and reducing the non-funding debt-to-equity ratio from a peak of 5.6x to 1.2x. The company suspended its quarterly dividend to prioritize equity retention, and management expects annual interest savings of $100 million from repaying MSR lines, partially offset by a 10% coupon on the preferred equity issued to Oaktree. UWM reported second-quarter operating income of $180 million on loan origination volume of $40 billion, down from $44.9 billion in the first quarter, and management said the company can handle up to $300 billion in annual volume if rates decline. Ishbia also confirmed plans for litigation against Two Harbors and CrossCountry, citing inappropriate actions during the failed transaction.