U.S. consumer finance company J.G. Wentworth Co
has hired a financial adviser to help it address its
debt burden, as fierce competition eats into its profits, people
familiar with the matter said on Friday.
J.G. Wentworth, known for its catchy jingles and television
commercials, has hired investment bank Evercore Partners Inc
to help it fix its capital structure, which includes an
approximately $440 million term loan, the people said.
The sources asked not to be identified because the matter is
confidential. Spokespeople for J.G. Wentworth did not
immediately return requests for comment. Evercore declined to
J.G. Wentworth had $300 million drawn on its credit line as
of Sept. 30.
The Radnor, Pennsylvania-based company buys future payments
that consumers expect to receive from various sources including
state lotteries, insurance companies and annuities, and in turn
pays its customers a lump sum. J.G. Wentworth securitizes the
future payments and sells them.
Low interest rates have increased competition, J.G.
Wentworth said in its 2016 annual report.
The company has also been under investigation by the
Consumer Finance Protection Bureau. Specialty finance firms like
J.G. Wentworth and payday lenders were under scrutiny by the
CFPB, but the future of that effort is unclear after on-going
court attempts to dismantle the consumer advocacy agency.
J.G. Wentworth has faced financial struggles in the past,
when tightness in the credit markets hurt its ability to buy
customers' future payments.
The company filed for bankruptcy in 2009, which was
exceptionally short at just two weeks. Buyout firm JLL Partners
helped fund J.G. Wentworth's bankruptcy with an equity injection
and now owns about 5 percent of its shares. The company went
public in 2013.
J.G. Wentworth acquired competitor Peachtree Financial
Solutions in 2011, and in attempt to diversify its business,
expanded into the origination of residential mortgages in 2015
when it acquired WestStar Mortgage Inc.
For the quarter ended Sept. 30, J.G. Wentworth's most
recently reported period, the company reported record home loan
volume and stabilization in its other businesses.
J.G. Wentworth posted a loss of $18.7 million for the
quarter, up from a loss of $26.7 million in the same time period