The bonds will pay investors about 0.21% of the balance of a pool of mortgages, initially $11.8 billion, according to a person with knowledge of the offering, who asked not to be named because the information isn't public. The notes, with a final maturity in 2028, will be secured by Freddie Mac mortgage servicing rights, and will shrink with the balances of the related loans, the person said.
Ocwen said Feb. 6 that it had agreed "to put an indefinite hold" on its plans to purchase servicing rights on $39 billion of loans without government backing from Wells Fargo. The deal was shelved amid concern by Benjamin Lawsky, head of New York's Department of Financial Services, that the servicer was growing too fast.
Ocwen said in December that it's developing an origination channel through a strategic alliance with Lenders One, a mortgage cooperative owned by Altisource, a company Ocwen spun off in 2009.
Atlanta-based Ocwen, the largest non-bank servicer, has a speculative-grade issuer rating of B from Fitch Ratings partly because of its "aggressive acquisition strategy," the rankings firm said in a Feb. 11 statement.
Barclays Plc and Morgan Stanley are managing its bond sale, which is expected to be completed next week and offer cash for the company to finance or refinance purchases or originations of servicing rights, the person said.
Katarina Wenk-Bodenmiller, a spokeswoman for Ocwen at Sommerfield Communications Inc., and Thomas Fitzgerald, a spokesman for McLean, Virginia-based Freddie Mac, didn't immediately return telephone messages seeking comment.