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Altisource Portfolio stock shoots up after reaching agreement with most loan holders

Altisource Portfolio Solutions ASPS stock surged 22% in Friday afternoon trading after the company that provides services for the real estate and mortgage industries reached an agreement with holders representing the vast majority of its term loans to extend the maturity of those loans.

Lenders holding ~98% of Altisource Portfolio's ASPS term loans agreed to exchange the existing loans for first lien loans with a maturity date of April 2025 and an option to extend to April 2026. The company said it's reaching out to the remaining lenders to obtain their agreement.

Altisource Portfolio ASPS reported preliminary Q4 adjusted EBITDA of $0.6M vs. -$8.84M in Q4 2021. Preliminary Q4 net loss attributable to Altisource was $11.3M compared with net income of $70.6M in the year-ago quarter.

Q4 service revenue of $32.8M, dropped 11% Y/Y. Service and Real Estate segment revenue of $26.5M increased 15% Y/Y, while Origination segment revenue of $6.3M dropped 50% Y/Y.

The company also provided some outlook commentary. "Our later stage and higher margin foreclosure and REO auction services should benefit from the early 2022 foreclosure initiations by late 2023 or early 2024," said Chairman and CEO William B. Shepro "In the meantime, we anticipate revenue growth from the early phases of the ongoing recovery of the default market and conversion of the sales pipeline."

It also expects margins to improve and positive adjusted EBITDA as it takes advantage of scale and cost savings.

"Our countercyclical default business could further benefit from deteriorating economic conditions and the significant number of servicing portfolios reported to be in the market for sale if acquired by our customers," Shepro added.

Earlier this year, SA contributor Ian Bezek said Altisource ASPS shares slumped enough to finally make them interesting