ISGN Boosts Cash Flow with $20M Line of Credit

ISGN increased its available cash flow with a $20 million secured line of credit obtained from JPMorgan Chase, the mortgage technology and fulfillment outsourcing vendor announced Wednesday.

The new line of credit refinances and replaces a $15 million line of credit the Melbourne, Fla.-based company had with a different bank and is available until Nov. 21, “enabling ISGN to utilize the entire $20 million immediately to take advantage of significant market opportunities in the first half of 2012,” ISGN said in a statement.

The cash injection comes less than six months after ISGN’s investors pumped $30 million in new capital into the company last August.

In addition to launching a new LOS in 2011, ISGN was thought to be a vendor ripe for acquisition. Speculation of a possible acquisition or strategic partnership first surfaced last February. Consulting and outsourcing services provider Accenture was believed to be the leading suitor for ISGN, but a deal never materialized. According to sources close to the negotiations, Accenture was indeed interested, but not at the price ISGN’s shareholders wanted for the company.

Accenture later acquired Zenta, a Dallas-based firm with similar mortgage outsourcing capabilities as ISGN, but lacking the array of mortgage origination and servicing technology that ISGN offers—a deal that was announced less than two weeks after ISGN’s shareholders announced their additional $30 million investment.

The new credit line is priced at an interest rate of 3.25%, plus LIBOR. ISGN said its majority shareholder, Chambal Fertilisers and Chemicals Limited, “enjoys a close business relationship with J.P. Morgan and provided the support necessary for ISGN to secure the funding at these favorable terms.”

“The $20 million credit line by JPMorgan, combined with $30 million in additional funding ISGN obtained from its investors last summer, positions us well going into 2012 to bring to market a number of new and improved solutions for our lender and servicer clients,” said ISGN CFO Shailendra Gupta, in a press statement.