Forbearance Agreement Mfa

MFA Financial enters into the third leniency agreement for Houlihan Lokey`s retirement operations and welcomes the successful $2.15 billion capital offering for MFA Financial, Inc. (NYSE:AMF), consisting of a $500 million senior private loan with warrants financed by Apollo Global Management, Inc. (Apollo) and a new $1.65 billion investment facility. , funded by Athene USA Corporation and Barclays Bank PLC. In addition, Apollo and Athene Holding Ltd. (Athene) have committed to acquire the AMF`s lower share of common shares of 4.9% or $50 million on the open market over a 12-month period, and Athene has committed to acquire part of AMF`s first securitization of unskilled residential mortgages under certain price conditions. The transaction was completed on June 26, 2020. MFA was founded in 1997 and is an in-house real estate investment trust (REIT) that is primarily active in investing on a debt-financed basis in residential mortgages, including residential home loans and securities. As of May 31, 2020, the AMF had a residential real estate portfolio of $6.6 billion. In mid-March 2020, unprecedented disruptions in residential mortgage markets led to a liquidity shortage due to COVID 19 concerns and subsequently forced the sale of mortgage-backed securities and other securities across the sector. This severe and brutal shock had a considerable impact on pricing, which led to an increase in marginal calls from the company`s senior secured lenders.

Despite significant asset disposals for liquidity creation, the AMF was unable to meet its many significant marginal appeals and opened leniency talks with lenders, which finally reached an agreement on April 10, 2020, which was then extended until the end of June 2020. Proceeds from the transaction will allow the company to withdraw from the leniency agreement, pay cumulative unpaid dividends on its Series B and Series C preferred shares, and provide additional liquidity to take advantage of the benefits of current price distortions for residential real estate loans. Houlihan Lokey worked as an exclusive investment agent at MFA and helped organize, structure and negotiate the $500 million senior private loan and new long-term asset financing, as well as as a financial advisor for the provision of a pool of unskilled mortgages. The success of the transaction underscores Houlihan Lokey`s ability to bring together sectoral, capital market and financial restructuring know-how to achieve a comprehensive solution for our clients, particularly in times of extreme market volatility. In addition, MFA Financial stated that it sold residential mortgage assets and generated US$3.5 billion in proceeds that were used to reduce related pension obligations. The Company sold approximately $2.9 billion in residential mortgage securities, including $1.4 billion in mortgage-backed securities, $1.3 billion in non-public securities and $44.7 million in debt. It also transferred $659.9 million to residential real estate loans and $136.8 million to mortgage services related to right-wing assets. As a result of these collective measures, MFA Financial has reduced its overall commitment to unpaid marginal appeals by about 43%.


Comments are closed.