is making another significant effort to restructure its debt.
A subsidiary of Onity's PHH Mortgage Corp. has priced $500 million of 9.875% senior notes due 2029, it said this week. The publicly traded company will use proceeds from the sale, along with its own cash, to redeem a series of notes due in the coming years.
Net proceeds will be placed in escrow, pending the completion of Onity's sale of a 15% stake in a mortgage servicing rights investment vehicle to Oaktree Capital Management. Onity said the sale of the notes is expected to close Nov. 6.
Proceeds from this week's debt offering will redeem PHH Mortgage's 7.875% senior notes due 2026, and all of Onity's outstanding 12.00% and 13.25% senior second lien notes due 2027, it said. Qualified investors will be able to purchase the new notes at 99.556% of their principal amount.
The $500 million figure is slightly larger than the $475 million pricing Onity initially announced Monday. Onity had previously pledged to redeem a minimum of $150 million in notes during the fourth quarter.
A representative for Onity didn't immediately respond to a request for comment Friday.
The move from the company, , is its latest debt reduction effort since it reported a slimmer $11 million profit in the second quarter. Onity a month ago said it sold its interest in the aforementioned MSR vehicle to Oaktree for approximately $49 million.
Other recent Onity moves include a reverse mortgage assets securitization in September that provided $46.1 million in liquidity to PHH Mortgage. Another MSR sale then was also anticipated to reduce Onity's MSR debt by $73.4 million, and generate $26.5 million in cash slated to cover corporate debt.
In Mid-September, the servicer and originator said it bought out another $23.5 million of PHH notes.
A month earlier, Onity with an unpaid principal balance of $3 billion from Waterfall Asset Management, and issued the seller non-convertible cumulative preferred stock with a par value of $51.7 million.
"Our ability to take advantage of these attractive business opportunities is a direct result of continued strong and disciplined execution consistent with our strategy, financial objectives, and our commitment to create value for shareholders," said Glen A. Messina, chair, president and CEO of Onity, in a September press release.