Springleaf Holdings, Inc. (NYSE:LEAF) announced today another significant step toward completing the company’s previously disclosed mortgage liquidation plan. At December 31, 2013, the company’s real estate portfolio totaled approximately $9 billion 1 on a historical accounting basis. By June 30, 2014, the company had closed on the sale of approximately $1.5 billion of real estate loans backed by securitization interests, and today the company is reporting that it completed the sale of certain performing and non-performing mortgage loans (“whole loans”) of $1 billion to Credit Suisse Securities (USA) LLC (“Credit Suisse”). The sale was completed pursuant to the company’s previously announced agreement to sell to Credit Suisse whole loans of approximately $1.7 billion. Credit Suisse continues to perform diligence on the remaining whole loans and additional sales may be completed during the fourth quarter of 2014, though there can be no assurances as to what portion of the remaining whole loans will be sold or the timing of such sales. As of September 30, 2014, the company has closed on the sale of an additional $6 billion in real estate loans and securitization interests since June 30, 2014 (including sales that closed on August 29, 2014, as previously announced), leaving less than $1.5 billion of real estate loans in the company’s portfolio. Through a strategy of further sales to Credit Suisse or other parties and natural portfolio runoff, the company’s goal is to achieve the target of holding approximately $1 billion or less in real estate loans by December 31, 2014. The company also announced today the substantial completion of the wind down of its real estate servicing operation, which follows the sale of the company’s mortgage servicing rights for certain securitized loans to a subsidiary of Nationstar Mortgage Holdings Inc. (NYSE:NSM) on August 29, 2014. As of October 1, 2014, substantially all of the company’s remaining first lien real estate portfolio is being serviced by Nationstar and a third party servicer pursuant to separate subservicing agreements with the company.
Separately, Springleaf announced today that on Friday, October 3, 2014, the company and its co-investors closed on a $2.6 billion asset-backed secured refinancing of a consumer loan portfolio with an unpaid principal balance of approximately $2.74 billion (referred to as the “SpringCastle” portfolio) in which it acquired an interest in April, 2013, and for which it assumed servicing later that year. The refinancing will generate incremental proceeds of approximately $1.13 billion for the SpringCastle co-investors, with the company’s share totaling approximately $530 million. The company anticipates that it will invest approximately $360 million of such proceeds in certain securities offered in connection with the refinancing.About Springleaf Holdings, Inc. Springleaf is a leading consumer finance company providing loan products to customers through its nationwide branch network and through iLoan, its internet lending division. Springleaf has a nearly 100-year track record of high quality origination, underwriting and servicing of personal loans, primarily to nonprime consumers. Springleaf operates one of the largest consumer finance branch networks in the United States, serving its customers through nearly 830 branches in 26 states. For more information, visit www.springleaffinancial.com/about-us. Forward Looking Statements This press release contains "forward‐looking statements" within the meaning of the U.S. federal securities laws. These forward looking statements include, without limitation, statements concerning plans, objectives, goals, strategies, future events or performance, and other statements, which are not statements of historical facts, such as the sale of additional whole loans and our goal with respect to holdings of real estate loans. Statements preceded by, followed by or that otherwise include the words "anticipate," "expect," "estimate," “may,” "goal," and similar expressions are intended to identify forward‐looking statements. These statements involve predictions of the future and are based on assumptions that may be imprecise or incorrect and are dependent on a number of factors many of which are beyond our control. Specific factors that may affect our ability to sell additional whole loans or achieve our target goal of real estate holdings include, but are not limited to, completion of the due diligence, the results of the due diligence and the availability of other potential purchasers. Forward‐looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company to be materially different from any future results, performance or achievements expressed or implied by such forward‐looking statements. We caution you not to place undue reliance on these forward‐looking statements that speak only as of the date they were made. We do not undertake any obligation to publicly release any revisions to these forward‐looking statements to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events. You should not rely on forward looking statements as the sole basis upon which to make any investment decision.
1 Financial data regarding real estate loans and related amounts are presented on a historical accounting basis, which is a basis of accounting other than U.S. GAAP.