PennyMac announces proposed private offering of $650M in senior notes

California-based multichannel lender and servicer PennyMac Financial Services announced on Monday a proposed private offering of a $650 million aggregate principal amount of senior notes that the company says it will pay back with interest by 2030.

The notes will “be fully and unconditionally guaranteed on an unsecured senior basis” by the company’s existing businesses, except for certain specific outliers it does not specify.

The proceeds will go to repay borrowings the company has made toward its secured mortgage servicing rights (MSRs) facilities, other unspecified debts and “other general corporate purchases,” the company said in an announcement of the offering. They will only be sold to certain large investors, according to the announcement.

“The offering will be made solely by means of a private placement to qualified institutional buyers,” the announcement said, and have not and are not expected to be “registered under the Securities Act or under any state securities laws and, unless so registered, may not be offered or sold in the United States or to U.S. persons absent an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws.”

Last month, PennyMac released its Q1 2024 earnings report in which it posted a profit of $39 million. The company attributed a quarterly gain in production revenue to higher net gains on loans held for sale at fair values due to higher volumes in its direct-to-consumer channel, which the company expanded in 2022.

The company also reported growth in its wholesale channel, according to the report.

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