Rocket plans to raise $4B to pay off Mr. Cooper debt

Rocket Cos. is offering a combined $4 billion in senior notes to pay some of Mr. Cooper's ten-figure debt in anticipation of the major acquisition.

The Detroit-based fintech said Tuesday it wants to sell $2 billion of senior notes due 2030 and an additional $2 billion of senior notes due 2033, unconditionally guaranteed by Rocket Mortgage. The notes will also be guaranteed on an unsecured basis by Mr. Cooper and Redfin, pending Rocket's acquisition of the public companies. 

The megalender said it intends to pay Mr. Cooper's senior notes due in 2026, 2027 and 2028, according to a press release. Rocket will also have the option to pay the Coppell, Texas-based servicer's senior notes due from 2029 to 2032.

The bonds won't be registered with the Securities and Exchange Commission and instead will be offered to institutional investors. The offering also isn't contingent on the consummation of either the Redfin or Mr. Cooper acquisitions, although the announcement includes other stipulations. 

Spokespersons for both Rocket and Mr. Cooper declined to comment Tuesday.

What debts does Mr. Cooper owe?

In all, Mr. Cooper has just over $4.8 billion in combined unsecured senior notes due between 2026 and 2032, according to its 2024 annual filing. Rocket intends to pay the principal and interest on 5% senior notes due 2026, an offering listed by Mr. Cooper at $500 million; 6% senior notes due 2027, listed at $600 million; and 5.5% senior notes due 2028, listed at $850 million.

The Mr. Cooper debts Rocket could pay or amend at its discretion include 6.5% senior notes due 2029, an offering listed by the servicer at $750 million; 5.125% senior notes due 2030, listed at $650 million; 5.750% senior notes due 2030 at $650 million; and 7.125% senior notes due in 2032, which Mr. Cooper listed at $1 billion. 

In all, the servicer reported a $4.95 billion principal amount of total unsecured senior notes, minus $59 million in purchase discount and unamortized debt issuance costs. 

Rocket also must redeem the notes if it doesn't complete its Mr. Cooper acquisition by Sept. 30, 2026. Additionally if Rocket doesn't use bond money for Mr. Cooper debt within 45 days of the closing, it must return any unused funds to investors. 

The move comes a month after Rocket secured a $1.15 billion revolving credit agreement with JPMorgan Chase, which can increase to $2.25 billion pending its Mr. Cooper purchase. That agreement replaced a similar $1.15 billion credit line, and the new agreement lasts through 2028. 

Rocket rocked the mortgage industry in March with its $1.75 billion acquisition of Redfin and $9.4 billion purchase of Mr. Cooper a few weeks later. Those acquisitions are expected to close in the second half of 2025.

The lender posted a $212 million net loss in the recent first quarter, but remains well-capitalized, with $8.1 billion in total liquidity.