Loandepot files $250 million shelf registration

Loandepot has filed a $250 million shelf registration, setting up potential future funding for its operations or repayment of debt.

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The lender and servicer filed the form with the Securities and Exchange Commission Thursday, two days after it revealed a larger net loss for the first quarter. According to the latest filing, the up to $250 million could also be used for acquisitions, capital expenditures, or other corporate purposes.

The offering could be sold via Class A common stock, debt securities or other financial instruments. Such an offering could also dilute the value of company shares held by current stockholders. Loandepot’s stock was trading around $1.40 per share in the mid-afternoon Friday, and it has wavered slightly in the past week. 

A spokesperson for Loandepot Friday said the company had no comment. 

Loandepot’s financial standing

The Southern California-based giant said it ended the first quarter with $277.4 million in cash and cash equivalents, a 17.7%, or $59.8 million decrease from the end of the fourth quarter. 

The spending occurred in a less-than-stellar period for the company. Loandepot reported a large year-over-year gain in production volume and slight uptick in total market share to around 1.4%. It also however posted continually declining pull-through weighted gain on sale margins, which executives this week blamed on fewer originations of higher-margin government loans and fewer home equity lines of credit. 

At large, the company reports $2.1 billion in debt obligations, which includes mortgage servicing rights facilities. The lender has $340.6 million outstanding on 8.750% senior secured notes which mature next November. It also reports $499.4 million outstanding on 6.125% senior unsecured notes which mature in April 2028. 

Loandepot Chief Financial Officer David Hayes, in response to an analyst on the earnings call earlier this week, said the company is actively mulling strategies to address the debt maturities. 

“The markets are quite turbulent as you well know, right now,” he said. “And so we are trying to be very thoughtful about how we approach that, but we were hoping to have a resolution on that in the coming months.”

A year removed from a long-term pivot, Loandepot continues to gear up in anticipation of a more favorable interest rate environment. The lender announced in March its return to the wholesale space after a three-year hiatus, and it raised its warehouse financing slightly in the recent period.  

The company has also hyped its new partnership with Figure Technology Solutions, suggesting the new speedy 5×5 HomeLoan product will lower production costs.