Onity Group Prices Additional $200 Million Senior Notes
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3d ago
0mins
Source: seekingalpha
- Note Issuance Size: Onity Group's subsidiaries priced an additional $200 million of 9.875% senior notes at 103.25% of face value, expected to close on January 30, 2026, indicating strong financing capability in the capital markets.
- Effective Yield: The notes imply an effective yield of 8.515%, providing relatively high returns for investors while reflecting market assessments of Onity's credit risk, which may impact future financing costs.
- Use of Proceeds: The net proceeds will be utilized for general corporate purposes, including repayment of mortgage servicing rights indebtedness, demonstrating the company's strategic intent to optimize its capital structure and reduce financial costs.
- Series Consolidation: The new notes will be issued as an add-on to the $500 million of the same notes issued in November 2024, forming a single series that enhances debt liquidity and market acceptance.
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Analyst Views on ONIT
Wall Street analysts forecast ONIT stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for ONIT is 55.00 USD with a low forecast of 50.00 USD and a high forecast of 60.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
3 Analyst Rating
2 Buy
1 Hold
0 Sell
Moderate Buy
Current: 47.210
Low
50.00
Averages
55.00
High
60.00
Current: 47.210
Low
50.00
Averages
55.00
High
60.00
About ONIT
Onity Group Inc. is a non-bank mortgage servicer and originator. It provides solutions through its primary brands, PHH Mortgage Corporation, and Liberty Reverse Mortgage. PHH Mortgage provides services in the country, focused on delivering a variety of servicing and lending programs. Liberty is a reverse mortgage lender dedicated to education and providing loans that help customers meet their personal and financial needs. Its segments are Servicing, Originations, and Corporate. Servicing segment comprises two components: its owned MSRs and its subservicing portfolio. The segment invests its capital to fund purchases and originations of its owned mortgage servicing rights (MSRs) and servicing advances. Originations segment purchases MSRs through bulk portfolio purchases, through flow purchase agreements with its network of mortgage companies and financial institutions, and through participation in the Agency Cash Window (or Co-Issue) programs. Its subsidiary is PHH Mortgage Corporation.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Onity Group Prices Additional $200 Million Senior Notes
- Note Issuance Size: Onity Group's subsidiaries priced an additional $200 million of 9.875% senior notes at 103.25% of face value, expected to close on January 30, 2026, indicating strong financing capability in the capital markets.
- Effective Yield: The notes imply an effective yield of 8.515%, providing relatively high returns for investors while reflecting market assessments of Onity's credit risk, which may impact future financing costs.
- Use of Proceeds: The net proceeds will be utilized for general corporate purposes, including repayment of mortgage servicing rights indebtedness, demonstrating the company's strategic intent to optimize its capital structure and reduce financial costs.
- Series Consolidation: The new notes will be issued as an add-on to the $500 million of the same notes issued in November 2024, forming a single series that enhances debt liquidity and market acceptance.
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Onity Group Launches $150 Million Senior Notes Offering
- Note Offering Size: Onity Group's subsidiaries PHH and PHH Escrow Issuer have launched a $150 million offering of 9.875% senior notes due 2029, which will form a single series with the previously issued $500 million notes from November 6, 2024, thereby enhancing the company's financing capabilities.
- Clear Use of Proceeds: The net proceeds from this offering will be utilized for general corporate purposes, including the repayment of certain debts of PMC and PAS, aimed at optimizing the company's capital structure and reducing financial risk.
- Financial Performance Exceeds Expectations: Onity Group reported a GAAP EPS of $2.03 for Q3 2025, beating estimates by $0.12, with revenue of $280.3 million exceeding expectations by $32.1 million, showcasing the company's strong performance in AI-driven growth and subservicing expansion.
- Long-term Growth Outlook: Onity Group anticipates exceeding its full-year adjusted ROE guidance, indicating that the company's strategic decisions in continuous investment and innovation will drive sustainable growth in the future.
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