PennyMac Financial Services Inc. has signed a $200 million revolving credit facility with Morgan Stanley to fund the purchase of mortgages.
The Moorpark mortgage lender reached the agreement on July 2 with the New York bank and will use the funds to buy performing mortgages originated by third-party lenders and package them for resale to Fannie Mae and Freddie Mac.
The credit line will cost the company the London Interbank Offered Rate, or Libor, “plus a small margin,” the company said in a Securities and Exchange Commission filing.
Penny Mac also must maintain a minimum net worth of $90 million, have an unrestricted cash flow of $20 million and meet other financial requirements.
PennyMac spokesman Kevin Chamberlain said that the company plans to access and replenish the credit facility continually.
“The quicker you can do this, the more profitable it is,” he said. “The sweet spot here would be to do this 25 to 30 times a year.”
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