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Ditech Holding Corporation Enters Into Restructuring Support Agreement

Ditech Holding Corporation ("Ditech Holding") today announced that it, along with certain of its subsidiaries including Ditech Financial LLC and Reverse Mortgage Solutions, Inc. (collectively with Ditech Holding, the "Company"), has entered into a Restructuring Support Agreement (the "RSA") with certain lenders holding more than 75% of Ditech Holding's term loans (the "Consenting Term Lenders"). The RSA provides for a restructuring of the Company's debt while the Company continues to evaluate strategic alternatives. Under the RSA, the Company will pursue a recapitalization that deleverages its capital structure by extinguishing over $800 million in corporate debt, and a liquidity enhancing transaction that includes an appropriately sized working capital facility at emergence. As contemplated by the RSA, the Company simultaneously continues to consider a broad range of options, including but not limited to potential transactions such as a sale of the Company and/or a sale of all or a portion of the Company's assets, as well as potential changes to the Company's business model.

To facilitate this financial restructuring, the Company filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York.

The Company and its employees remain focused on providing homeowners with the right home financing solutions and the same high-quality service they have come to expect from its businesses.

Thomas F. Marano, President and Chief Executive Officer of Ditech, said, "Since we completed a recapitalization last February, we have made important progress on our strategic initiatives and our expense management efforts. However, as a result of market challenges that have continued to accelerate and pressure our business, we must take further action. We intend to use this process to restructure our balance sheet and help us meet our obligations. We will continue to evaluate a broad range of options with the goals of maximizing value and creating the best path forward for our business. We are pleased to have the support of our lenders in this process."

Mr. Marano added, "As we move forward, we remain firmly committed to our mission of serving customers through the homeownership journey. I want to thank our employees for their continued dedication to serving our customers. Our people will continue to be the driving force behind our success."

In connection with the court-supervised process, Ditech has received commitments for up to $1.9 billion in debtor-in-possession ("DIP") financing to support its operations during the Chapter 11 process.

Ditech has filed a number of customary first day motions with the Bankruptcy Court that, among other things, seek authorization to continue the operations of the Company in the ordinary course of business. The Company expects to receive court approval for these requests.

via Yahoo


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