FORT WASHINGTON, Pa., Oct. 20, 2017 /PRNewswire/ -- Walter Investment Management Corp. ("Walter" or the "Company") (NYSE: WAC.BC) today announced that it has entered into a Restructuring Support Agreement (the "Noteholder RSA") with certain holders (the "Noteholders") of more than 50% by principal amount of the Company's 7.875% Senior Notes due 2021 (the "Senior Notes") that contemplates a financial restructuring which, if consummated, is expected to strengthen the Company's balance sheet. The Company also announced that it has entered into an Amended and Restated Restructuring Support Agreement (the "Term Lender RSA" and, collectively with the Noteholder RSA, the "RSAs") with certain lenders (the "Lenders") holding term loans (the "Term Loans") under the Company's Amended and Restated Credit Agreement, dated as of December 19, 2013 (the "Existing Credit Agreement"), in an amount more than 48% of the outstanding Term Loans. The RSAs will become effective once holders of 66(2/3) % in the aggregate of Senior Notes and Term Loans, respectively, become party to the applicable RSA (the "Support Effective Date"). The parties may terminate the RSAs if the Support Effective Date does not occur before October 25, 2017.
Through consummation of the transactions contemplated in the RSAs, the Company expects to reduce its outstanding corporate debt as of June 30, 2017 by approximately $700 million and enhance its financial flexibility as it continues the ongoing transformation of its business. In addition to the recoveries to the Company's Lenders and Noteholders, as described below, the RSAs also contemplate a recovery for the holders (the "Convertible Noteholders") of the Company's 4.50% convertible senior subordinated notes due 2019 and the Company's existing common stockholders if the requisite number of Convertible Noteholders support the restructuring.
The Company plans to implement the terms of the RSAs by soliciting votes from the Lenders, the Noteholders, and the Convertible Noteholders on a pre-packaged chapter 11 plan of reorganization. Following the solicitation, which is intended to begin next month, the Company intends to voluntarily file a pre-packaged plan of reorganization under chapter 11 of the United States Bankruptcy Code in late November 2017, to execute the various transactions contemplated by the RSAs. Walter intends to complete the reorganization process on an expedited basis, potentially concluding by the end of 2017 and under all circumstances not later than January 31, 2018. Under the contemplated plan for reorganization agreed to in the RSAs (the "Prepackaged Plan"), it is intended that only the holding company will file for reorganization under chapter 11. Walter's operating entities, including Ditech Financial LLC and Reverse Mortgage Solutions, Inc., are expected to remain out of chapter 11 and continue their operations in the ordinary course throughout the consummation of the financial restructuring transactions. The Company believes it has ample liquidity to support its businesses and the costs of the restructuring.
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