Ocwen's MSR Sales Should Generate Liquidity for Bond Payments: Moody's

Ocwen Financial's sale of mortgage-servicing rights should generate sufficient liquidity for the Atlanta company to meet its debt-payment obligations, Moody's Investors Service said.

Ocwen has reached a series of agreements to sell a combined $90 billion in mortgage-servicing rights. The sales should provide enough liquid resources for Ocwen to make its debt payments, Moody's analysts wrote in a research report on Thursday.

Specifically, the sales should allow Ocwen to meet the terms of its outstanding $1.2 billion in senior secured bank term loans, Moody's said. The sales should also generate enough cash for Ocwen to repay its $350 million of unsecured debt, even if it's terminated as servicer on some of its remaining contracts.

Ocwen still may have trouble generating new business, however, as a result of ongoing regulatory matters, the ratings service said.

"Even assuming the worst is behind it, the residual effects of Ocwen's regulatory issues will pose an ongoing obstacle to its ability to compete and generate new business," said Warren Kornfeld, senior vice president at Moody's.