Item 1.01. Entry into a Material Definitive Agreement
On July 13, 2018, Wand Merger Corporation (the “Issuer”), a wholly-owned subsidiary of WMIH Corp. (the “Company” or “WMIH”),
closed the previously announced offering (the “Offering”) of $950,000,000 aggregate principal amount of the Issuer’s 8.125% Notes due 2023 (the “2023 Notes”) and $750,000,000 aggregate principal amount of the Issuer’s
9.125% Notes due 2026 (the “2026 Notes” and, together with the 2023 Notes, the “Notes”). The Issuer sold the Notes to the initial purchasers in the Offering, which was exempt from the registration requirements of the Securities
Act of 1933, as amended (the “Securities Act”). The Notes were offered for resale to “qualified institutional buyers” as defined in Rule 144A under the Securities Act and to
non-U.S.
persons outside the United States in reliance on Regulation S under the Securities Act.
The proceeds from the Notes were funded into escrow, which upon
release will be used, together with the proceeds from the issuance of the Company’s common stock and the Company’s cash and restricted cash on hand, to consummate the Company’s previously announced acquisition of Nationstar Mortgage
Holdings Inc. (“Nationstar”) and the refinancing of certain of Nationstar’s existing debt and to pay related fees and expenses or otherwise in accordance with the terms of the escrow agreement, dated as of July 13, 2018, among
the Issuer, Wells Fargo Bank, National Association, as trustee (in such capacity, the “Trustee”), and Wells Fargo Bank, National Association, as escrow agent. At the consummation of the acquisition, the Issuer will merge (the
“Merger”) with and into Nationstar, with Nationstar surviving the Merger as a wholly-owned subsidiary of the Company. As a result of the Merger, Nationstar will assume all of the Issuer’s obligations under the Notes (the
“Assumption”).
If the Merger is not consummated on or prior to November 12, 2018 (as such date may be extended pursuant to the agreement
governing the Merger (the “Merger Agreement”)), or if prior to such date, the Merger Agreement is terminated, the Notes will be subject to a special mandatory redemption at a redemption price of 100.0% of the initial issue price of the
Notes, plus accrued and unpaid interest to the redemption date.
The Notes were issued pursuant to the Indenture, dated as of July 13, 2018 (the
“Indenture”), among the Issuer, the Company and the Trustee. Interest on the 2023 Notes accrues beginning on July 13, 2018 at a rate of 8.125% per year. Interest on the 2026 Notes accrues beginning on July 13, 2018 at a rate of
9.125% per year. Interest on the Notes is payable semi-annually on January 15 and July 15 of each year, commencing on January 15, 2019. The 2023 Notes mature on July 15, 2023 and the 2026 Notes mature on July 15, 2026.
The Indenture contains customary terms, events of default and covenants for an issuer of
non-investment
grade debt
securities. These covenants include limitations on, among other things, incurring additional debt or issuing certain preferred shares, paying dividends on or making other distributions in respect of capital stock or making other restricted payments,
making certain investments, selling or transferring certain assets, creating liens on certain assets to secure debt, consolidating, merging, selling or otherwise disposing of all or substantially all assets, entering into certain transactions with
affiliates and designating subsidiaries as unrestricted subsidiaries.
Prior to (i) July 15, 2020, in the case of the 2023 Notes, and
(ii) July 15, 2021, in the case of the 2026 Notes, the Issuer may, at its option and on any one or more occasions, redeem some or all of the Notes of such series at a make-whole price plus accrued and unpaid interest to the redemption
date.
Prior to (i) July 15, 2020, in the case of the 2023 Notes, and (ii) July 15, 2021, in the case of the 2026 Notes, the Issuer
may, at its option and on any one or more occasions, redeem up to 40% of the aggregate principal amount of the Notes of such series, in each case, with an amount equal to or less than the net proceeds from certain equity offerings at a redemption
price of 108.125%, in the case of the 2023 Notes, and 109.125%, in the case of the 2026 Notes, plus accrued and unpaid interest to the redemption date.
On or after (i) July 15, 2020, in the case of the 2023 Notes, and (ii) July 15, 2021, in the case of the 2026 Notes, the Issuer may, at
its option and on any one or more occasions, redeem some or all of the Notes of such series at the applicable redemption prices set forth in the Indenture, plus accrued and unpaid interest to the redemption date.
If a “change of control” (as defined in the Indenture) occurs, the holders of the Notes may require the Issuer to purchase for cash all or a portion
of their Notes at a purchase price equal to 101% of the principal amount of the Notes, plus accrued and unpaid interest to the repurchase date. The Merger will not constitute a “change of control” under the Indenture.
Prior to the consummation of the Merger, the Notes will initially be senior obligations of the Issuer, secured by
the escrowed property. Upon the consummation of the Merger and the Assumption, the Notes will be senior unsecured obligations of the Issuer and will rank senior in right of payment to any future subordinated indebtedness of the Issuer, equally in
right of payment with all existing and future senior indebtedness of the Issuer and effectively subordinated to any future secured indebtedness of the Issuer to the extent of the value of collateral securing such indebtedness.
Prior to the consummation of the Merger, the Notes will be fully and unconditionally guaranteed by the Company. Upon the consummation of the Merger and the
Assumption, the Notes will be fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by the Company and each of Nationstar’s existing and future wholly-owned domestic subsidiaries (other than certain excluded
subsidiaries). The guarantees will be senior unsecured obligations of the guarantors and will rank senior in right of payment to any future subordinated indebtedness of the guarantors, equally in right of payment with all existing and future senior
indebtedness of the guarantors and effectively subordinated to any future secured indebtedness of the guarantors to the extent of the value of collateral securing such indebtedness. The Notes and the guarantees will be structurally subordinated to
the indebtedness and liabilities of the Company’s subsidiaries that do not guarantee the Notes.
The foregoing summaries of the Indenture and the
Notes do not purport to be complete and are qualified in their entirety by reference to the Indenture, a copy of which is filed as Exhibit 4.1 to this Form
8-K,
and such documents are incorporated herein by
reference.