Summary
Rocket Companies, Inc. (RKT) announced through its wholly-owned subsidiary, Quicken Loans, LLC, the entry into a Master Repurchase Agreement (MRA) with Nomura Corporate Funding Americas, LLC and Oakdale Secured Funding Trust Quartz. This agreement provides for a total of $1.0 billion in financing, split between $500.0 million in uncommitted and $500.0 million in committed facilities. The MRA is specifically for the origination of GSE-eligible and non-GSE-eligible mortgage loans, with a maturity date of December 17, 2021. The financing will accrue interest based on one-month LIBOR plus an applicable margin. This new financing facility is significant as it increases the Company's total funding capacity to $29.3 billion as of December 18, 2020, a notable increase from $27.5 billion at the end of the third quarter of 2020 and $19.13 billion at the end of 2019. The MRA includes standard covenants and events of default, such as change of control, and imposes restrictions on dividend payments and asset disposals if an event of default occurs. It also requires the Company to maintain certain financial ratios, including debt-to-tangible net worth, pre-tax net income, and liquidity.
Key Highlights
- 1Quicken Loans, LLC, a subsidiary of Rocket Companies, Inc., entered into a Master Repurchase Agreement (MRA).
- 2The MRA provides up to $1.0 billion in financing: $500 million uncommitted and $500 million committed.
- 3The financing is designated for originating various types of mortgage loans, including GSE-eligible and jumbo loans.
- 4The agreement has a maturity date of December 17, 2021, and interest is tied to one-month LIBOR plus a margin.
- 5This new facility brings Rocket Companies' total funding capacity to $29.3 billion as of December 18, 2020.
- 6The MRA contains customary covenants, events of default, and financial maintenance requirements, including debt-to-tangible net worth and liquidity covenants.