DETROIT, MI – Rocket Mortgage, LLC, a subsidiary of Rocket Companies, Inc. (NYSE:RKT), has renewed and amended its credit agreements with Citibank, NA, increasing its financial flexibility. The mortgage giant, currently valued at $1.79 billion, is making these moves amid challenging market conditions. Data from InvestingPro shows the company is burning through cash quickly.

The changes, effective December 10, 2024, extend the maturity dates of the Master Repurchase Agreement (MRA) and Mortgage Servicing Rights (MSR) facility with Citibank by more than a year, from November 6, 2025 to November 10 . December 2026.

The MRA Amendment and related Amendment Number Ten to the Pricing Side Letter for the Master Repurchase Agreement also contain certain technical changes. The MSR Facility Amendment also introduces technical changes and extends its expiry date to align with the new maturity of the MRA.

These changes increased Rocket Companies’ total financing capacity to $27.0 billion, up from $24.5 billion as of September 30, 2024 and $24.3 billion at the end of the prior year. This capacity expansion underlines the company’s continued growth and strengthening of its financial position. The company has strong short-term liquidity with a current ratio of 6.35 despite having total debt of $15.3 billion.

The details of the changes will be fully disclosed in Rocket Companies’ Annual Report on Form 10-K for the period ended December 31, 2024. These strategic financial actions are expected to support Rocket Mortgage’s operations and growth initiatives over the extended term of the agreements.

In other recent news, Rocket Companies has seen a mix of financial adjustments and legal developments. Keefe, Bruyette & Woods downgraded shares of Rocket Cos to underperform, citing concerns about the impact of current mortgage rates on the company’s earnings. The company also lowered its price target on the shares to $11.50. Meanwhile, BofA Securities upgraded the company’s shares to Neutral and Piper Sandler maintained a Neutral rating but lowered its price target.

Rocket Companies reported a 32% year-over-year increase in adjusted revenue, reaching $1.323 billion in the third quarter. The company also announced strategic plans to double its purchase market share and increase refinance market share by 2027. In addition to these financial developments, Rocket Mortgage filed a lawsuit against the U.S. Department Housing and urban development (NS:) about a problem with the independence of the reviewer.

Rocket Companies also extended its repurchase agreement with UBS AG until November 2024, increasing its total financing capacity to $27.0 billion. These recent developments are part of a broader context that includes changes in the mortgage rate landscape and the potential impact on lenders like Rocket Companies.

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