California-based loanDepot on Monday announced it has closed a $300 million offering of notes backed by a revolving warehouse line of credit and secured by mortgages.
loanDepot said this is the 10th time it has closed a transaction of this kind. It follows other strategies to strengthen its financial position, including selling mortgage servicing rights (MSRs) and extending debt.
David Hayes, the company’s chief financial officer, said in a statement that the transaction demonstrates “loanDepot’s financing strategy and attractive capital raising alternatives, as we continue our focus on delivering exceptional service to our customers throughout the entirety of their homeownership journey.”
The notes were offered by Mello Warehouse Securitization Trust 2024-1 and secured by newly originated first-lien, fixed-rate and adjustable-rate residential mortgages. The loans are produced according to criteria from Fannie Mae, Freddie Mac and Ginnie Mae.
loanDepot said that the notes will terminate on the two-year anniversary of the initial purchase date, if the company exercises its right to prepay in full; or upon an event of default, according to filings with the Securities and Exchange Commission (SEC).
Under Frank Martell‘s leadership, loanDepot has improved its balance sheet and reduced its losses. loanDepot reported a non-GAAP adjusted net loss of $16 million in the second quarter, compared to a $39.5 million loss in the first quarter.
During the second quarter, the company extended about $500 million in debt due in 2025, which reduced its outstanding corporate debt by $137 million. It also sold MSRs of low-coupon originations from the 2020 and 2021 vintages, bringing its total unpaid principal balance (UPB) to $114 billion on June 30 compared to $142 billion on March 31.