Onity Group Concludes Sale of MSR Asset Vehicle to Oaktree

Onity Group Completes Major Asset Sale to Oaktree

Onity Group Inc. (NYSE: ONIT) has officially finalized a significant transaction with Oaktree Capital Management. This deal involves the sale of Onity's 15% stake in MSR Asset Vehicle LLC (MAV) for a notable cash amount of $49.5 million. The decision marks an important strategic move for the company as it navigates the complexities of the mortgage servicing market.

Details of the Transaction

The transaction was executed under the auspices of Onity’s subsidiary, PHH Mortgage Corporation, which will continue as the exclusive subservicer for MAV's existing portfolio. This arrangement will extend for an initial period of five years. Importantly, PHH will also manage the majority of any new mortgage servicing rights (MSRs) that MAV acquires moving forward.

Alongside this asset sale, Onity has leveraged the net proceeds from a recent offering of Senior Notes, amounting to $500 million. These high-yield notes are set to mature in 2029 and were finalized just prior to the closing of the MAV sale. The funds from this offering, in conjunction with cash reserves, are earmarked for redeeming approximately $574 million of Onity's existing corporate debt, which includes both Senior Notes due 2026 and Second Lien Notes due 2027.

Strategic Implications for Onity

Glen A. Messina, Chair, President, and CEO of Onity Group, expressed enthusiasm regarding the completion of this pivotal transaction. He indicated that the deal significantly enhances the company's capital framework and allows Onity to build on its critical subservicing relationship with MAV. By reducing its corporate debt burden, the company is poised for future financial flexibility and growth potential.

Importance of the Relationship with Oaktree

This transaction strengthens the existing partnership between Onity and Oaktree, a firm well-respected in the investment management sector. The collaboration is expected to pave the way for new strategic opportunities that will further bolster Onity’s market position and operational success.

About Onity Group Inc.

Onity Group Inc. is recognized as a leading non-bank mortgage servicer and originator. The company operates through its primary brands, including PHH Mortgage and Liberty Reverse Mortgage. PHH Mortgage is one of the largest servicers within the United States, providing a broad spectrum of loans and services aimed at meeting diverse customer needs. Liberty Reverse Mortgage specializes in reverse mortgages, emphasizing customer education and financial solutions.

Since its inception in 1988, Onity has expanded its footprint, maintaining operational bases in the United States and internationally, particularly in the U.S. Virgin Islands, India, and the Philippines. The company is committed to enhancing customer experiences through innovative solutions and responsive service.

Frequently Asked Questions

What was the recent transaction announced by Onity Group?

Onity Group announced the sale of its 15% interest in MSR Asset Vehicle LLC to Oaktree Capital Management for $49.5 million.

What will happen to PHH Mortgage Corporation after the transaction?

PHH Mortgage Corporation will remain the exclusive subservicer of the existing MAV portfolio for five years and will handle a majority of new MSRs acquired by MAV.

How will Onity utilize the proceeds from the sale?

The company plans to use the proceeds to help redeem approximately $574 million of its outstanding corporate debt.

What are the future prospects for Onity Group after this transaction?

The transaction is expected to enhance Onity's capital structure, providing financial flexibility and supporting future earnings growth.

Where is Onity Group headquartered?

Onity Group is headquartered in West Palm Beach, Florida, with offices across the United States and internationally.

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