Better Home & Finance announced Monday it is restructuring the $530 million convertible note arrangement made two years prior with its financier Softbank.
The mortgage lender will front a $110 million one-time cash payment to its lender and a $155 million new senior secured note by SB Northstar LP, a Softbank subsidiary, will be issued due Dec. 31, 2028, per a press release. The new note will accrue interest at a rate of 6% per annum.
Some stipulations are included with the new agreement with Softbank.
Going forward, Better will be restricted from incurring indebtedness and liens, as well as banned from making restricted payments and asset sales, per a filing with the Securities and Exchange Commission.
If Better were to go bankrupt, the principal amount of all accrued and unpaid interest on the new note will be due immediately, the SEC filing said.
The exchange is expected to close by April 28, the company disclosed. Kevin Ryan, Better's CFO, said the company will now be focusing on growth and profitability going forward, mainly doubling down on technology to do so.
"We will continue building out our NEO platform, lean into productivity-driven savings through AI deployment across our mortgage business, and drive costs down further in our corporate functions," said Ryan in a written statement Monday. "We are excited about using AI to drive the business towards growth and profitability, similar to the advances we experienced from 2016 to 2021, when we grew originations over 100x."
Better's CEO Vishal Garg has previously mentioned that investment into technology, specifically into AI, has a hefty price tag attached, but is worth it in the long run. The mortgage lender's build out of its
For 2024, the digital lender's technology expenses totaled $26.1 million, a slight decrease from a tech spend of $39.4 million in 2023.
It reported a
