Velocity Financial Lands $375M in New Funding

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Velocity Financial Inc. has entered into a new $175 million, five-year term loan with a syndicate of lenders including funds managed by Blackrock’s U.S. Private Capital group, Oaktree Capital Management L.P. and UBS O’Connor.

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The new facility has an initial $125 million funding as of the closing date, with an additional $50 million as a delayed draw feature. Proceeds reportedly will be used to refinance existing debt and originate new loans.

In addition, to finance new originations, Velocity has also secured a $200 million non-mark-to-market warehouse facility with Barclays Bank PLC.

Velocity CFO Mark Szczepaniak said in a prepared statement that the company intends to “capitalize on the considerable investment opportunities in today’s market through increased loan production and market share growth to expand our existing portfolio.”

He also acknowledged the role of Jefferies Finance LLC as sole lead arranger and sole bookrunner on the new term loan.

Velocity did not reply to Commercial Property Executive’s request for additional information.

Active in securitizations

Based in Westlake Village, Calif., Velocity specializes in originating and managing small-balance investor loans, secured primarily by one- to four-unit residential rental and small commercial properties. The company originates loans nationwide using an extensive network of independent mortgage brokers.

Velocity went public in January 2020, offering 7.25 million shares at $13.00 per share.

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And last July, the company completed its third securitization of 2020—and 15th since 2011—collateralized by $276 million in unpaid principal balance on loans typical of those made by Velocity.