CrossCountry Intermediate HoldCo, the direct parent of CrossCountry Mortgage (CCM), has priced an upsized offering of $750 million in senior notes due in 2031 as it refinances mortgage servicing rights (MSR) facilities tied to its growth plans. The offering came in 50% higher than previously expected.
The 7.75% senior notes will be issued on a senior unsecured basis and guaranteed by CCM and any future wholly owned domestic restricted subsidiaries that guarantee material corporate debt, the company said Tuesday. The transaction is expected to close on or about Aug. 12, subject to customary closing conditions.
“The Company expects to use the net proceeds from the offering to repay a portion of the amounts outstanding under CCM’s mortgage servicing rights line of credit and to pay related fees and expenses,” the company said in the announcement.
As previously reported by HousingWire, CCM was expected to issue $500 million in senior unsecured notes as the closing of Two Harbors Investment Corp.’s sale to CCM approached.
Fitch Ratings expects to rate that issuance at “BB-(EXP)” and said proceeds would likely repay MSR-backed facilities drawn to fund the $1.26 billion Two Harbors transaction.
The Two Harbors deal will add a $159 billion servicing portfolio to CCM’s $202 billion book as of the first quarter, according to Inside Mortgage Finance data. The transaction is expected to move CCM from No. 15 to No. 8 among the largest servicers by owned portfolios.
Fitch estimates CCM’s corporate leverage would rise to 2.4x after the Two Harbors acquisition, up from 1.2x in the second quarter of 2026 and above its 1.5x downgrade trigger.
“However, retained earnings growth should reduce leverage toward the company’s 1.0x target over the medium term,” Fitch said. “Negative rating action could result from an inability to reduce corporate leverage to 1.5x or below over the rating outlook horizon.”
A move from secured to unsecured debt is credit positive because it frees up collateral and supports liquidity, according to analysts.
CCM previously told HousingWire that leverage would temporarily increase due to the Two Harbors deal but argued that a larger, more cash-generative platform with higher recurring servicing cash flows and a larger MSR portfolio should support deleveraging toward a 1.0x target over the medium term.
This article was written by Flávia Furlan Nunes and generated with the assistance of HousingWire Automation, then reviewed by a HousingWire editor before publication.
