The firm previously offered to exchange $850 in principal amount for new notes and $250 in cash for each $1,000 in principal amount for old notes, but it's now offering a mixed consideration of $1,100 in cash and principal amount of new notes for each $1,000 principal amount of old notes, reflecting financial stress.
The debt extension is credit positive, giving them now two more years. Between now and the end of 2027, I think most market participants expect conditions to improve.
The fact that they are doing this exchange in about two years reflects the fact that they are in stress.
The cost of the debt is high not only because of the coupon but also because of the 10-percentage-point premium loanDepot is paying to extend the bonds, which brings the transaction to a 13.75% yield.
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