Pennymac's financial services company on Wednesday priced an upsized $750 million offering of 7.875% unsecured senior notes due 2029 in a private placement in part to pay off shorter-term debt.
The company had originally planned on a $650 million offering and the increase suggests demand for the longer notes was stronger than anticipated. Pennymac plans to use the new funding to reduce its outstanding secured term notes due 2025 and for general corporate purposes.
The notes will pay out to investors semi-annually on June 15 and Dec. 15 and will be guaranteed by the company by existing and future U.S. subsidiaries with some exclusions.
Potentially creating a new need for funding at Pennymac is
The use of the 2029 notes to pay off older obligations due in a couple years could be in line with a trend in which some nonbanks are working to shift to longer-term funding due to a proposed capital rule for depositories that could affect some sources in the future.
The notes could potentially fund the expansion in third-party origination channels.
The company has been adding to the products for mortgage brokers and is
Access to second liens has been increasingly important to originators because it gives them a way to give borrowers with lower-rate primary loans access to new funding without disrupting customers' lower-cost funding.
