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WESTLAKE VILLAGE, Calif. - PennyMac Financial Services, Inc. (NYSE:PFSI), a $5.1 billion market cap mortgage company currently trading at a P/E ratio of 13, announced Thursday it has priced a $650 million offering of senior notes due 2034 with an interest rate of 6.750%. According to InvestingPro data, the company’s financial health score is rated as FAIR, with notably strong historical returns over the past decade.
The notes will mature on February 15, 2034, with interest payable semi-annually beginning February 15, 2026. The offering is expected to close on August 12, 2025, subject to customary closing conditions, according to a company press release.
PennyMac Financial plans to use proceeds from the offering to repay borrowings under its secured MSR facilities, other secured debt, and for general corporate purposes. This debt restructuring comes as InvestingPro analysis shows the company has been quickly burning through cash, with negative free cash flow in recent quarters.
The notes will be fully guaranteed on an unsecured senior basis by the company’s existing and future wholly owned domestic subsidiaries, with certain exclusions.
The offering is being made through private placement to qualified institutional buyers under Rule 144A of the Securities Act and to certain non-U.S. persons under Regulation S. The notes have not been registered under the Securities Act and cannot be offered or sold in the United States without registration or an applicable exemption.
PennyMac Financial Services specializes in the production and servicing of U.S. mortgage loans. For the twelve months ended June 30, 2025, the company originated $134 billion in loans and serviced loans totaling $700 billion in unpaid principal balance.
The company employs approximately 4,400 people across the country and is recognized as a top mortgage lender and servicer in the nation.
In other recent news, PennyMac Financial Services Inc. reported its second-quarter earnings, revealing a miss on both earnings per share (EPS) and revenue estimates. The company posted an EPS of $2.54, which was below the forecasted $2.88, representing an 11.81% shortfall. Revenue also fell short of expectations, coming in at $444.73 million compared to the anticipated $545.04 million, marking an 18.4% deficit. Additionally, PennyMac Financial announced plans to offer $650 million in senior notes due 2034, with proceeds intended for repaying borrowings and other corporate purposes. Piper Sandler recently adjusted its price target for PennyMac Financial, lowering it to $121 from $125, while maintaining an Overweight rating on the stock. The adjustment followed the company’s operating miss in the second quarter, attributed to lower gain on sale income, despite higher servicing fees. These developments highlight key financial movements and strategic decisions within PennyMac Financial.
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