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Better Home & Finance Holding Co. — the parent of digital mortgage lender Better.com — has restructured about $534 million of its outstanding debt with SB Northstar, the asset management subsidiary of SoftBank, the company announced on Monday.
Better is retiring $530 million of outstanding debt accruing interest at 1% annually and due in 2028. In exchange, the company has issued $155 million in new senior secured notes to SB Northstar at a 6% annual interest rate due in December 2028. Better is also making a one-time cash payment of $110 million.
As part of the agreement, Better is granting the investor the right to designate one non-voting board observer starting June 1, 2025. In exchange, SB Northstar must continue to hold at least 25% of the total note amount, or 12% of the outstanding shares of the company’s Class A, B or C stock.
Vishal Garg, founder and CEO of Better.com, said in a statement that the transaction rightsizes the company’s liability structure, creating “approximately $265 million of positive pre-tax equity value for the company and its shareholders, as well as a path to long-term value creation for our equity holders.”
Kevin Ryan, chief financial officer of Better.com, said that after the restructuring, the company’s priorities are “growth and profitability.”
Better’s net loss decreased from $536 million in 2023 to $206 million in 2024. Last year, the company originated about $3.6 billion in loan volume, up from $3 billion in 2023. It also increased its total number of originations from 8,600 to 11,800 during the same period.
“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,” Garg said. “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.”
The NEO Powered by Better program included the onboarding of 110 NEO Home Loans originators across 53 branches.
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