UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 27, 2015
PennyMac Financial Services, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001- 35916 | 80-0882793 |
| (State or other jurisdiction | (Commission | (IRS Employer |
| of incorporation) | File Number) | Identification No.) |
| 6101 Condor Drive, Moorpark, California | 93021 |
| (Address of principal executive offices) | (Zip Code) |
(818) 224-7442
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
On July 27, 2015, PennyMac Financial Services, Inc. (the “Company”), through its indirect controlled subsidiary, PennyMac Loan Services, LLC (“PLS”), entered into an amendment to its master repurchase agreement, dated July 2, 2013, by and among Morgan Stanley Bank, N.A. (“Morgan Stanley”), on the one hand, and PLS, on the other hand (the “Repurchase Agreement”).
Pursuant to the terms of the Repurchase Agreement, PLS, may sell, and later repurchase, newly originated mortgage loans. The Repurchase Agreement is generally used to fund newly originated mortgage loans that are originated through PLS’s consumer direct lending channel or purchased from correspondent lenders through a subsidiary of PennyMac Mortgage Investment Trust and, in either case, held by PLS pending sale and/or securitization. The obligations of PLS are fully guaranteed by Private National Mortgage Acceptance Company, LLC (“PNMAC”). The Company is a holding corporation and its sole investment is an equity interest in PNMAC.
Under the terms of the amendment, (i) the maximum aggregate purchase price provided for in the Repurchase Agreement was temporarily increased from $200 million to $300 million, until December 1, 2015, with such $100 million increase on an uncommitted basis, (ii) PLS is required to maintain a minimum tangible net worth of $200 million effective July 27, 2015, and (iii) the termination date has been extended to July 26, 2016.
The Company, through PLS, is required to pay Morgan Stanley a commitment fee relating to the one-year renewal, as well as certain other costs and expenses associated with the preparation of the amendment. All other terms and conditions of the Repurchase Agreement remain the same in all material respects.
The foregoing description of the Repurchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the amendment, which has been filed with this Current Report on Form 8-K as Exhibit 10.1, and the full text of the Repurchase Agreement, which was filed as Exhibit 1.1 to the Registrant’s Current Report on Form 8-K as filed with the SEC on July 8, 2013, and any amendments to the Repurchase Agreement filed thereafter.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 of this report is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description |
| 10.1 | Amendment Number Five to the Master Repurchase Agreement, dated as of July 27, 2015, among PennyMac Loan Services, LLC, Morgan Stanley Bank, N.A. and Morgan Stanley Mortgage Capital Holdings LLC |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| PENNYMAC FINANCIAL SERVICES, INC. | ||
| Dated: July 30, 2015 | By: | /s/ Anne D. McCallion |
| Anne D. McCallion Chief Financial Officer | ||
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EXHIBIT INDEX
| Exhibit No. | Description |
| 10.1 | Amendment Number Five to the Master Repurchase Agreement, dated as of July 27, 2015, among PennyMac Loan Services, LLC, Morgan Stanley Bank, N.A. and Morgan Stanley Mortgage Capital Holdings LLC |
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Exhibit 10.1
AMENDMENT NUMBER FIVE
to the
MASTER REPURCHASE AGREEMENT
Dated as of July 2, 2013,
among
PENNYMAC LOAN SERVICES, LLC,
MORGAN STANLEY BANK. N.A.
and
MORGAN STANLEY MORTGAGE CAPITAL HOLDINGS LLC
This AMENDMENT NUMBER FIVE (this “Amendment Number Five”) is made this 27th day of July, 2015, among PENNYMAC LOAN SERVICES, LLC a Delaware limited liability company, as seller (“Seller”), MORGAN STANLEY BANK, N.A., a national banking association, as buyer (“Buyer”) and MORGAN STANLEY MORTGAGE CAPITAL HOLDINGS LLC, a New York limited liability company, as agent for Buyer (“Agent”), to the Master Repurchase Agreement, dated as of July 2, 2013, between Seller and Buyer, as such agreement may be amended from time to time (the “Agreement”). Capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms in the Agreement.
RECITALS
WHEREAS, Seller, Buyer and Agent have agreed to amend the Agreement to extend the Termination Date thereunder and make certain other changes, as more specifically set forth herein; and
WHEREAS, as of the date hereof, Seller represents to Buyer and Agent that Seller is in full compliance with all of the terms and conditions of the Agreement and each other Program Document and no Default or Event of Default has occurred and is continuing under the Agreement or any other Program Document.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and for the mutual covenants herein contained, the parties hereto hereby agree as follows:
Section 1. Amendment. Effective as of July 27, 2015 (the “Amendment Effective Date”),
(a) the defined term "Termination Date in Section 1.01 of the Agreement is hereby amended to read in its entirety as follows:
“Termination Date” shall mean July 26, 2016 or such earlier date on which this Repurchase Agreement shall terminate in accordance with the provisions hereof or by operation of law.
(b) Section 5.02 of the Agreement is hereby amended by adding a new Subsection (o) thereto immediately following Subsection (n) thereto to read in its entirety as follows:
(o) Servicer shall have a servicer rating of not lower than SQ4+ by Moody's or Average by S&P.
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(c) Section 7.14 of the Agreement is hereby amended to read in its entirety as follows:
7.14 Maintenance of Tangible Net Worth. The Seller shall not permit its Tangible Net Worth to be less than (a) $90,000,000 at any time prior to July 27, 2015, or (b) $200,000,000 at any time on or after July 27, 2015.
(d) Section 8(u) of the Agreement is hereby amended to read in its entirety as follows:
(u) [Reserved]; or
Section 2. Defined Terms. Any terms capitalized but not otherwise defined herein shall have the respective meanings set forth in the Agreement.
Section 3. Effectiveness. This Amendment Number Five shall become effective as of the date that the Agent shall have received:
(a) counterparts hereof duly executed by each of the parties hereto, and
(b) counterparts of that certain Amendment Number Five to the Pricing Side Letter, dated as of the date hereof, duly executed by each of the parties thereto.
Section 4. Fees and Expenses. Seller agrees to pay to Buyer and Agent all reasonable out of pocket costs and expenses incurred by Buyer or Agent in connection with this Amendment Number Five (including all reasonable fees and out of pocket costs and expenses of Buyer’s or Agent’s legal counsel) in accordance with Section 13.04 and 13.06 of the Agreement.
Section 5. Representations. Seller hereby represents to Buyer and Agent that as of the date hereof and taking into account the terms of this Amendment Number Five, Seller is in full compliance with all of the terms and conditions of the Agreement and each other Program Document and no Default or Event of Default has occurred and is continuing under the Agreement or any other Program Document.
Section 6. Binding Effect; Governing Law. This Amendment Number Five shall be binding and inure to the benefit of the parties hereto and their respective successors and permitted assigns. THIS AMENDMENT NUMBER FIVE SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF (EXCEPT FOR SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW WHICH SHALL GOVERN).
Section 7. Counterparts. This Amendment Number Five may be executed by each of the parties hereto on any number of separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument.
Section 8. Limited Effect. Except as amended hereby, the Agreement shall continue in full force and effect in accordance with its terms. Reference to this Amendment Number Five need not be made in the Agreement or any other instrument or document executed in connection therewith, or in any certificate, letter or communication issued or made pursuant to, or with respect to, the Agreement, any reference in any of such items to the Agreement being sufficient to refer to the Agreement as amended hereby.
[Signature Page Follows]
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IN WITNESS WHEREOF, Seller, Buyer and Agent have caused this Amendment Number Five to be executed and delivered by their duly authorized officers as of the Amendment Effective Date.
PENNYMAC LOAN SERVICES, LLC
(Seller)
By: /s/ Pamela Marsh
Name: Pamela Marsh
Title: Executive Vice President, Treasurer
MORGAN STANLEY BANK, N.A.
(Buyer)
By: /s/ Geoffrey Kott
Name: Geoffrey Kott
Title: Authorized Signatory
MORGAN STANLEY MORTGAGE CAPITAL HOLDINGS LLC
(Agent)
By: /s/ Christopher Schmidt
Name: Christopher Schmidt
Title: Vice President
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