Ccm Set To Raise $900m In Oversubscribed Debt Sale

CrossCountry Mortgage (CCM) is set to close on a $900 million debt issuance at the end of September to repay its mortgage servicing rights (MSR) line of credit, after the offering came in 50% above the original target.

The 6.50% senior notes, to be issued by parent company CrossCountry Intermediate HoldCo to qualified investors, are due in 2030. They are guaranteed on an unsecured basis, meaning they are not backed by collateral.

Fitch Ratings assigned the notes a BB- rating and reaffirmed a B+ long-term issuer default rating for CCM. The agency said the addition of unsecured debt diversifies the company’s capital structure and enhances financial flexibility “in times of stress due to lower balance sheet encumbrance.”

CCM’s leverage — measured as gross debt to tangible equity — stood at 4.0x in the second quarter, down from a peak of 5.3x in 2019 but higher than 2.8x at year-end 2024. Corporate leverage, excluding origination funding facilities, was just 0.6x, which Fitch considers low.

“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,” CCM said in a statement.

The transaction is expected to close on Sept. 30, subject to the satisfaction of customary closing conditions.

Fitch cited CCM’s strong market share in the distributed retail channel, solid operating track record, experienced management team and conservative leverage as credit strengths. The company ranked as the eighth-largest lender in the first half of 2025, with $23.05 billion in originations, according to Inside Mortgage Finance.

But Fitch also flagged challenges, including exposure to cyclical mortgage market conditions, reliance on secured short-term wholesale funding, regulatory risk tied to Ginnie Mae loans and key personnel risk related to majority shareholder Ron Leonhardt.

Despite those risks, CCM has remained profitable. Its pretax return on average assets (ROAA), adjusted for Ginnie Mae loan repurchases, was 3.0% as of June 30 — down from 6.1% in 2024 but an improvement from 1.2% in 2023. MSRs totaled 118% of equity at the end of June, up sharply from 36% at year-end 2020 but still below the peer average of 166%.

As of the second quarter, liquidity consisted of $141 million in cash and $393 million in undrawn borrowing capacity on its MSR line.

Mortgage lenders have been increasingly active in the debt markets. In early September, UWM Holdings Corp. closed a $1 billion senior notes issuance. Other recent issuers include Pennymac, Rocket Companies, Better Home & Finance Holding Co., Rithm Capital and Planet Financial Group.