UWM pays up for capital as it resets leverage targets

United Wholesale Mortgage (UWM) president and CEO Mat Ishbia is pitching the lender’s $2.05 billion capital raise with Oaktree Capital Management and his family as a long-term strategic partnership to support the company’s growth. But the high cost of the structure and dilution are weighing on investors, alongside the fact that it follows several setbacks for the company. UWM’s stock traded below $1 on Thursday morning, the day after the deal was announced. “Oaktree is not just capital; they’re strategic partners of ours,” Ishbia said Thursday during a 30-minute online Q&A with shareholders and analysts. “If it was just capital, I could put money in myself, or we could get random people to put capital.”He added that the transaction “was a strategic partnership with Oaktree because of their MSR background” that was also tied their knowledge and sophistication around capital markets. UWM is raising $1.65 billion in preferred equity, including $1.5 billion from Oaktree and $150 million from the Ishbia family, plus a $400 million rights offering. Oaktree has designated Nicholas Basso as a director of the board and Dante Quazzo as a non-voting board observer. The transaction will ma...