loanDepot Subsidiaries Issue $300M in Securitized Notes

IRVINE, CA – loanDepot, Inc. (NYSE:LDI), a leader in the residential mortgage loan sector with a market capitalization of $346 million and annual revenue of $986 million, has announced through an SEC filing that two of its indirect subsidiaries, Mello Warehouse Securitization Trust 2025-1 ("the Trust") and loanDepot.com, LLC, have entered into a significant financial arrangement. On April 11, 2025, they executed an Indenture with U.S. Bank Trust Company, National Association, which also involves U.S. Bank National Association as the standby servicer and initial securities intermediary.

Under the Indenture, the Trust has issued $300 million of notes (the "MWST Notes"), which are supported by a revolving warehouse line of credit. These MWST Notes are secured by first-lien residential mortgage loans, either fixed-rate or adjustable-rate, that comply with the purchasing criteria of Fannie Mae (OTC:FNMA) or Freddie Mac (OTC:FMCC) or the guarantee criteria of Ginnie Mae. The Master Repurchase Agreement (MRA), also dated April 11, 2025, between loanDepot, as seller, and the Trust, as buyer, outlines the eligibility criteria for these mortgage loans.

The MRA includes a guaranty by LD Holdings Group, LLC, a subsidiary of loanDepot, Inc., ensuring loanDepot’s obligations under the agreement. The MWST Notes carry interest based on 30-day Term SOFR plus a margin and have a termination date which is the earliest of three specific occurrences: three years from the initial purchase date, an optional prepayment in full by loanDepot, or an event of default resulting in the acceleration of the obligations under the Indenture.

This financial move is part of loanDepot’s broader strategy to manage its financing and liquidity needs effectively. According to InvestingPro data, the company is currently experiencing significant cash burn, with negative free cash flow of $892 million in the last twelve months. The company, which trades on the New York Stock Exchange under the ticker (NYSE:LDI), is known for its diverse range of home loan products, including mortgages and refinancing options.

The details of the Indenture, Master Repurchase Agreement, and the Guaranty are outlined in the exhibits attached to the SEC filing, which provide further legal and financial information. This transaction represents a strategic step for loanDepot in securing additional capital and demonstrates the company’s continued commitment to growth within the competitive mortgage lending market.

The information in this article is based on a press release statement and provides an overview of the recent financial activities of loanDepot, Inc. as reported to the Securities and Exchange Commission. InvestingPro analysis suggests the stock is currently undervalued, despite its high debt-to-equity ratio of 20x and weak overall financial health score. Discover 12 additional key insights about LDI and access the comprehensive Pro Research Report, available exclusively with an InvestingPro subscription.

In other recent news, LoanDepot Inc. reported its financial results for the fourth quarter of 2024, revealing a significant earnings miss. The company posted an earnings per share (EPS) of -$0.17, which was well below the forecasted EPS of -$0.01. LoanDepot’s revenue for the quarter also fell short, coming in at $257 million against an expected $310.09 million. Despite these disappointing figures, the company highlighted a notable 34% year-over-year increase in loan origination volume, amounting to $7.2 billion. Additionally, LoanDepot has completed its Vision 2025 strategic program and launched a new initiative, Project NorthStar, aimed at future growth. The company has maintained a cash position of $422 million at the end of the quarter. Analysts have noted the challenging conditions of the mortgage market, which continue to impact LoanDepot’s financial performance. Looking forward, LoanDepot has set expectations for its pull-through weighted lock volume for Q1 2025 to be between $4.8 billion and $5.8 billion, and origination volume to range from $4.5 billion to $5.5 billion.

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