Irvine-based mortgage investor Impac Mortgage Holdings Inc. is buying a home loan servicing business from UBS AG, which in turn is making a $1.2 million investment in Impac.
Terms of the servicing business acquisition weren’t disclosed.
As part of the deal, Impac plans to issue warrants that convert to about 1.5 million shares of Impac, a stake worth about $1.2 million.
The shares are 2% of Impac’s outstanding stock.
Impac recently refinanced debt with a loan from UBS. As part of that deal, Impac agreed to issue UBS warrants to purchase up to 7% of the company’s outstanding common stock.
Impac acquires mortgages from brokers as investments. Since the collapse of the mortgage market last year, the company has been focused on servicing loans it owns.
Earlier this year, the company reported a loss of $2 billion for 2007.
The company doesn’t expect a profit this year but it projects generating cash.
Impac’s shares stayed flat at close of trading on a market value of about $62 million.
