Seeking Alpha

Lackluster results as Ocwen sells bonds to finance growth

  • Ocwen Financial's (OCN +1.9%) hope to sell up to $1B of a new type of debt this year to finance growth may be clouded by lackluster demand for last week's issuance. Nicknamed "Oasis," the debt deal brought is just $123.5M vs. $136M targeted by Ocwen.
  • Not helping is the big bullseye placed on Ocwen's back by regulators, and the day the deal priced was the same day Maxine Waters got into the act, asking the OCC to have a look at the nonbank servicers.
  • The so-called "Oasis" bonds act as a hedge for Ocwen which is exposed to prepayment risk if interest rates fall and lead to a surge in mortgage refinancing (on the other hand, higher rates boost the value of MSRs).
  • Other sector names: NSM, WSC, NRZ, HLSS, ASPS
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