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DITECH HOLDING CORP filed this Form 10-K on 04/16/2019
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The 2018 Term Loan bears interest at a rate equal to, at the Company's option (i) LIBOR plus 6.00%, subject to a LIBOR floor of 1.00% or (ii) an alternate base rate plus 5.00% (which interest will be payable (a) with respect to any alternate base rate loan, on the last business day of each March, June, September and December, and (b) with respect to any LIBOR loan, on the last day of the interest period applicable to the borrowing of which such loan is a part). The 2018 Term Loan matures on June 30, 2022. The Company made principal payments on the 2013 Term Loan and 2018 Term Loan totaling $157.6 million during the period from February 10, 2018 through December 31, 2018 and $110.6 million during the period from January 1, 2018 through February 9, 2018. The outstanding principal balance on the 2018 Term Loan was $961.4 million at December 31, 2018. The Company recorded a loss on extinguishment of debt of $4.5 million during the period from February 10, 2018 through December 31, 2018 and $0.9 million during the period from January 1, 2018 through February 9, 2018, due to the write-off of deferred fees and discount on the term loans. The Company is required to make quarterly payments on the 2018 Term Loan in the amounts listed below (in thousands):
Repayment Date
Principal Amount 
March 2019 (1)

June 2019

September 2019

December 2019

each March, June, September and December thereafter

As a result of the DHCP Chapter 11 Cases discussed further in Note 31, the Company did not make the quarterly principal payment for March 2019.
In addition to the quarterly installments detailed above, mandatory repayment obligations under the 2018 Credit Agreement include, subject to exceptions, (i) 100% of the net sale proceeds from the sale or other disposition of certain non-core assets of the Company and of certain of the Company’s subsidiaries, (ii) 80% of the net sale proceeds of certain non-ordinary course asset sales and dispositions of certain bulk MSR, (iii) 100% of the net cash proceeds from the issuance of certain indebtedness and (iv) beginning with the fiscal year ending December 31, 2018, 50% of the Company’s excess cash flow as defined in the agreement. The 2018 Credit Agreement allows the Company to prepay, in whole or in part, the Company’s borrowings outstanding thereunder, together with any accrued and unpaid interest, with prior notice and subject to the prepayment premium described below and breakage or redeployment costs.
The 2018 Credit Agreement contains affirmative and negative covenants and representations and warranties customary for financings of this type, including restrictions on liens, dispositions of assets, fundamental changes, dividends, the ability to incur additional indebtedness, investments, transactions with affiliates, modifications of certain agreements, certain restrictions on subsidiaries, issuance of certain equity interests, changes in lines of business, creation of additional subsidiaries and prepayments of other indebtedness, in each case subject to customary exceptions. The 2018 Credit Agreement permits the incurrence of an additional incremental letter of credit facility in an aggregate principal amount at any time outstanding not to exceed $30.0 million. The 2018 Credit Agreement also contains financial covenants requiring compliance with certain asset coverage ratios and, commencing in 2020 as described below, an interest expense coverage ratio and a first lien net leverage ratio.
On March 29, 2018, the Company entered into an amendment to the 2018 Credit Agreement to (i) waive the Company’s compliance with the interest expense coverage ratio covenant and the first lien net leverage ratio covenant until the test period ending March 31, 2020, (ii) require the Company to make additional principal payments from March 29, 2018 to December 31, 2018 in an aggregate amount equal to $30.0 million, which the Company satisfied during the second quarter of 2018, (iii) provide for a one percent prepayment premium in connection with prepayments of the term loans made during the first 18 months after entering into the amendment (for all prepayments of principal other than mandatory amortization payments and the payments described in the foregoing clause (ii)), and (iv) increase the minimum requirement for Asset Coverage Ratio A for all test periods ending on March 31, 2018 through December 31, 2018.
On February 8, 2019, the Company entered into the DHCP RSA with the Consenting Term Lenders holding, as of February 11, 2019, more than 75% of the Term Loans outstanding under the 2018 Credit Agreement. Refer to Note 31 for further information.