AI-powered mortgage platform, Better Home & Finance, has successfully retired approximately $530m of outstanding convertible notes.
The debt restructuring was carried out in partnership with its existing noteholder, SB Northstar LP, in a deal comprising a one-time cash payment of $110m and the issuance of $155m of new senior secured notes. These notes will mature on 31 December 2028 and will carry an annual interest rate of 6%, payable either in cash or in kind.
Founded as an AI-driven home finance platform, Better.com has funded over $100bn in mortgages through its proprietary Tinman AI platform. The company leverages technology to streamline mortgage processes, making homeownership faster, cheaper and more accessible.
With the completion of its debt restructuring, Better.com plans to use its strengthened financial position to invest further in its technology and operations. The company intends to expand its NEO platform, accelerate the deployment of AI to enhance productivity across its mortgage services, and reduce costs within its corporate functions. This move is aimed at driving growth and improving profitability.
As part of this restructuring, Better.com has not only reduced its debt burden but also created approximately $265m of positive pre-tax equity value, reinforcing its commitment to long-term value creation for shareholders.
Better.com founder and CEO Vishal Garg said, “We are extremely pleased to retire the Company’s outstanding convertible debt and right size its liability structure. This transaction will create approximately $265 million of positive pre-tax equity value for the Company and its shareholders, as well as create a path to long-term value creation for our equity holders. We continue to invest in building the leading AI platform in the mortgage industry, and fulfilling our mission of making homeownership cheaper, faster and easier, and just plain better for all Americans.”
Better.com CFO Kevin Ryan said, “With the completion of this debt restructuring, our next two priorities are growth and profitability. 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. 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.
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