NYSE moves to delist FOA warrants from the exchange

The New York Stock Exchange (NYSE) on Wednesday announced that the warrants of Finance of America, traded under the ticker symbol “FOA.WS,” will be delisted from the exchange. The class A common shares traded under the “FOA” ticker symbol, however, will continue to be traded.

“Trading in the warrants will be suspended immediately,” NYSE stated. “Trading in the Company’s Class A common stock — ticker symbol FOA — will continue on the NYSE.”

“NYSE Regulation has determined that the warrants are no longer suitable for listing based on ‘abnormally low selling price’ levels, pursuant to Section 802.01D of the Listed Company Manual,” the NYSE announced. “The company has a right to a review of this determination by a Committee of the Board of Directors of the Exchange.

“The NYSE will apply to the Securities and Exchange Commission (SEC) to delist the warrants upon completion of all applicable procedures, including any appeal by the company of the NYSE Regulation staff’s decision.”

When reached, an official with NYSE declined to comment beyond the scope of the announcement.

Warrants and common stock operate differently. Warrants act as a kind of “coupon” that allows the holder to “buy or sell a set number of shares of a company’s stock at a predetermined price within a specified timeframe but without any obligation,” according to information on the topic published by Nasdaq.

A corporate executive with FOA explained to HousingWire’s Reverse Mortgage Daily (RMD) that this is not expected to impact the company’s operations in a tangible way, nor is it expected to impede the progress of the other measures FOA is taking to shore up its class A common share stock price.

The warrants, the executive said, stem from the time that the company was first preparing to go public through a special purpose acquisition company, which has not been a focus of the company as it is primarily focused on its previously announced efforts to raise its share price.

When asked whether the move by NYSE would potentially lead to a delisting of common shares, the executive indicated that there was no immediate concern of a material impact for the class A shares.

The reality of this move was described as “matter of fact,” the executive said, and the company will continue pressing forward to both improve its stock price and offer its products for senior borrowers.

In mid-June, an FOA filing with the SEC indicating that the company was preparing to perform a reverse stock split at a 10-to-1 ratio in a move designed to boost the company’s stock price.

FOA first received word from the NYSE that it was out of compliance with its continued listing standard in December 2023, with a second notice issued in February 2024. NYSE requires that listed stocks maintain a price of at least $1 per share “over a consecutive 30 trading-day period,” but the price has reached that threshold only eight times in 2024. At the end of trading on Wednesday, the share price stood at $0.47.

Following the announcement of the reverse stock split, FOA said it would restructure its unsecured debt into new, secured debt that will come due beyond the original 2025 maturity date. The company and noteholders agreed to “an exchange of any and all of the outstanding 2025 unsecured notes” into two new secured tranches.

The first is for up to $200 million in aggregate principal of senior secured first-lien notes due in 2026 (with an option to extend it to 2027 if the company elects to do so), while the second is for up to $150 million in aggregate principal of exchangeable senior first-lien notes due in 2029.

But the company has also recently endured other challenges, including a round of layoffs and the corresponding, voluntary departure of its chief retail sales officer. It was not specified how many employees nor which specific divisions were impacted.

According to Home Equity Conversion Mortgage (HECM) endorsement data compiled by Reverse Market Insight (RMI), FOA is the leading reverse mortgage industry lender in the country with 7,566 endorsements in the 12-month period ending in June 2024.

Data from New View Advisors also shows that FOA is the leading HECM-backed Securities (HMBS) issuer, with 31.9% of the overall market based on the first six months of the year.

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