Loandepot, Inc. current report, 10 February 2022

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Business Context and Reporting Period

loanDepot, Inc. filed this Form 8-K on February 10, 2022, reporting amendments to financing arrangements involving its mortgage servicing rights, servicing advances, and advance receivables. The filing was signed on February 16, 2022. One amendment is described as dated February 14, 2022, although the filing’s reported date is February 10.

Key Financial and Capital Structure Information

  • The 2017-VF1 variable funding note had a maximum capacity of $150.0 million and $69.4 million outstanding as of January 31, 2022.
  • The Series 2018-GT1 Term Notes had $200.0 million outstanding as of January 31, 2022. They mature in October 2023, or October 2025 if extended under the applicable indenture.
  • The 2021-PIAVF1 variable funding note had a maximum amount of $150.0 million and no balance outstanding as of February 10, 2022.
  • The 2021-SAVF1 variable funding note had a maximum amount of $150.0 million and no balance outstanding as of February 10, 2022.
  • The 2017-VF1, 2021-PIAVF1, and 2021-SAVF1 facilities generally bear interest based on the greater of Adjusted Daily Simple SOFR or an applicable floor, plus a margin.
  • The Term Notes accrue interest at 30-day LIBOR or another permitted benchmark, such as SOFR, plus a margin.
  • The filing does not provide revenue, net income, cash flow, operating margin, or company-wide liquidity figures.

Material Changes Versus the Prior Comparable Period

  • The amendments update benchmark-related provisions, including replacing LIBOR with SOFR for applicable interest-rate calculations.
  • The amendments revise definitions related to Affiliates, Permitted Holders, Parthenon Investors, and Required Payment.
  • The GMSR participation structure was clarified to separate interests in portfolio excess spread, principal and interest advance reimbursement amounts, and servicing advance reimbursement amounts.
  • The 2017-VF1 facility had previously been amended to extend its maturity to November 15, 2022; the February 2022 amendment primarily updated interest-rate and benchmark provisions.
  • The GMSR MSR Indenture and related repurchase agreements and indenture supplements were amended to update provisions benefiting noteholders and document the related financing arrangements.

Guidance, Outlook, Risks, Contingencies, and Unusual Items

  • No earnings guidance or operating outlook is provided.
  • The facilities are secured by mortgage servicing rights, excess spread, principal and interest advance reimbursement amounts, and servicing advance reimbursement amounts, as applicable.
  • loanDepot is subject to financial covenants under the financing facilities. The company stated that it was in compliance with all applicable covenants as of January 31, 2022, for the 2017-VF1 and Term Note facilities, and as of February 10, 2022, for the 2021-PIAVF1 and 2021-SAVF1 facilities.
  • Benchmark transition from LIBOR to SOFR may affect future interest expense and financing terms.
  • The filing creates or modifies obligations under secured financing and repurchase arrangements, but does not provide a consolidated net debt or liquidity analysis.

Investor Verification Checklist

  • Verify the full terms, margins, interest-rate floors, repayment provisions, and benchmark fallback language in Exhibits 10.1 through 10.7.
  • Confirm outstanding balances and borrowing capacity under each variable funding note after the amendments.
  • Assess the collateral coverage and valuation of the pledged mortgage servicing rights and advance receivables.
  • Review financial covenant definitions, testing dates, and available waivers or remedies.
  • Reconcile the February 10 filing date, the February 14 amendment date referenced for the 2020-VF1 facility, and the February 16 signature date.