UWM boosts unsecured debt offering to $800M

UWM Holdings Corp., the parent company of leading U.S. mortgage lender United Wholesale Mortgage (UWM), has raised $800 million through an unsecured debt offering, a 60% increase from its initial plan. 

The offering, targeted at qualified investors, priced at 6.625% with senior notes due in 2030. These notes are guaranteed on a senior unsecured basis by UWM and share equal payment priority with the company’s existing senior unsecured notes.

According to filings with 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 slated to close on Dec. 10, pending customary closing conditions.

As of the third quarter, UWM reported total non-funding debt of $2.4 billion, with a debt-to-equity ratio of 1.11. The company’s liquidity stood at $2.5 billion, including $636 million in cash.

Fitch Ratings assigned a ‘BB-(EXP)’ rating to the notes, noting the issuance is unlikely to significantly alter UWM’s leverage profile since the proceeds are expected to refinance secured debt.

“Fitch could upgrade the ratings by one notch if the company economically addresses its $800 million 2025 unsecured note maturity without further asset encumbrance and maintains corporate leverage at or below 1.0x,” the ratings agency explained.

Several mortgage lenders, including Freedom Mortgage, loanDepot, Mr. Cooper and PennyMac, have issued debt over the past two years, leveraging refinancing opportunities and extending terms.