PHH Corp., Mt. Laurel, N.J. has priced an add-on offering of $100 million of debt, to replace the $250 million debt offering it cancelled on Dec. 2 due to market conditions.
This add-on offering is attached to the sale of $350 million in 9-1/4% senior notes due 2016 which took place on Aug. 11, 2010. The issuance is priced at 99.01% plus accrued interest from Sept. 1 to the anticipated settlement date of Dec. 12. The add-on brings the total amount of debt under this issuance to $450 million. The holders of these new notes will have 22.22% of the total voting power associated with the original offering.
The notes mature on March 1, 2016, with interest payments on March 1 and Sept. 1 of each year until maturity. The yield-to-maturity will be 9.533%.
As in the offering that was cancelled, PHH plans to use the expected $96.3 million in proceeds to help pay off $250 million in debt due on April 15, 2012. It plans to use cash on hand and other borrowings to pay off the rest of the total due.
PHH added that these proceeds, pending the repayment of the April 2012 debt, may be used to temporarily repay outstanding borrowings under its credit facility, originate mortgage loans or may be invested temporarily in short-term interest-bearing investment funds or similar assets.
As of Sept. 30, PHH had a total of $1.1 billion of unsecured debt and no secured debt.
