Ocwen Financial (OCN) announced late Friday that it entered into an amendment on its senior secured term loan that will go into effect on Monday, April 20.
According to Ocwen, the amendment “removes, with respect to the 2014 fiscal year, the requirement that Ocwen’s financial statements and the related audit report must be unqualified as to going concern.”
The amendment also extends the deadline for Ocwen to deliver its 2014 audited financial statements to May 29, 2015.
Ocwen said that it is currently continuing to prepare information to demonstrate the company's ability to operate as a “going concern” and to provide that information to its auditor for the auditor’s review of the Ocwen’s 2014 financial statements.
“Following the execution of this amendment and other amendments to the company’s debt agreements, no defaults will occur in the event that the company’s auditor includes disclosure in its 2014 audit report relating the company’s ability to operate as a going concern,” Ocwen said in a release.
Ocwen also announced that it repaid $17 million of the senior secured term loan on Friday, which brings it total repayment to $91 million in the last three weeks.
“We appreciate the confidence our lenders have shown in the plan we have put forth,” Ron Faris, chief executive officer of Ocwen, said. “We have completed our first significant sale and transfer of agency servicing rights and used all of the net sale proceeds received to date to repay a portion of our SSTL. We expect to receive additional proceeds in accordance with the terms of the transaction.”
Ocwen said in December that it plans to exit agency servicing entirely, and recently announced several massive agency mortgage servicing rights sales.
Ocwen stated last month that it intended to sell two portfolios of agency servicing, a $25 billion portfolio and a $9.8 billion portfolio, to Nationstar.
Additionally, Ocwen announced recently that it agreed to sell a $9.6 billion mortgage servicing rights portfolio to Green Tree Servicing, a subsidiary of Walter Investment Management (WAC).
That announcement came on the heels of reports that Ocwen intended to sell a $45 billion portfolio of agency servicing to JPMorgan Chase (JPM).
Earlier this week, Ocwen disclosed that it recorded a preliminary net loss of $546 million in 2014. On a per share basis, the loss was $4.18 per share.
The results were a stark reversal from 2013, when Ocwen reported net income of $310.4 million, or $2.13 per share.
Ocwen said that the massive loss wasn’t due to a drop in revenue. In fact, Ocwen generated preliminary revenue of $2.1 billion, up 4% compared to $2.0 billion in the prior year, and its preliminary income from operations was $76.1 million for 2014.
"I am encouraged by the progress Ocwen has made so far in 2015,” Faris said. “We currently expect to be profitable in 2015 and meet all of our ongoing financial and servicing obligations. In addition to generating substantial cash flow from pending asset sales that have already been announced so far this year, we expect our historical track record of generating substantial cash flow from operations to continue in 2015 and beyond.”
