The RSA obligates the Debtors and the Consenting Term Lenders to, among other things, use commercially
reasonable efforts to support and not interfere with consummation of the Restructuring, and as to the Consenting Term Lenders, vote to accept the Plan subject to the receipt of solicitation materials in accordance with section 1125(g) and 1126 of
the Bankruptcy Code. The RSA may be terminated upon the occurrence of certain events, including, among other requirements, the failure to meet specified milestones relating to the filing, confirmation and consummation of the Plan, and in the event
of certain breaches by the parties under the RSA. Although the Company intends to pursue the Restructuring in accordance with the terms set forth in the RSA, there can be no assurance that the Company will be successful in completing a restructuring
or any other similar transaction on the terms set forth in the RSA, on different terms, or at all.
The foregoing description of the RSA does not purport
to be complete and is qualified in its entirety by reference to the full text of the RSA, a copy of which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.
Any new securities to be issued pursuant to the Restructuring have not been registered under the Securities Act of 1933, as amended (the Securities
Act), or any state securities laws. Therefore, the new securities may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and any applicable state
securities laws. This Current Report on Form
8-K
does not constitute an offer to sell or buy, nor the solicitation of an offer to sell or buy, any securities referred to herein, nor is this Current Report on
Form
8-K
a solicitation of consents to or votes to accept any chapter 11 plan. Any solicitation or offer will only be made pursuant to a disclosure statement and only to such persons and in such jurisdictions
as is permitted under applicable law.
Commitment Letter
On February 8, 2019, the Company, as guarantor, along with its wholly-owned subsidiaries Ditech Financial and RMS, entered into a commitment letter
(Commitment Letter) with Barclays Bank PLC (Barclays) as Administrative Agent and as Buyer and Nomura Corporate Funding Americas, LLC as Buyer (together with Barclays, the DIP Lenders), regarding the terms of
certain master warehouse refinancing facilities (the DIP Facilities), which, if approved by the Court (as defined below), will provide the Company up to $1.9 billion in available warehouse financing. Proceeds of the DIP Facilities
are intended to refinance RMSs and Ditech Financials existing warehouse and servicer advance facilities and to fund Ditech Financials and RMS continued business operations, providing the necessary liquidity to the Debtors to
implement the Restructuring.
Specifically, under the DIP Facilities (i) up to $650 million will be available to fund Ditech Financials
origination business, (ii) up to $1.0 billion will be available to RMS, and (iii) up to $250 million will be available to finance the advance receivables related to Ditech Financials servicing activities. In addition, the
lenders under the DIP Facilities have agreed to provide Ditech Financial, through the pendency of the Chapter 11 Cases, up to $1.9 billion in trading capacity for Ditech Financial to hedge its interest rate exposure with respect to the loans in
Ditech Financials loan origination pipeline.
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