Velocity Financial, Inc. Announces Issuance of $75 Million of Senior Secured Notes

Velocity Financial, Inc. (NYSE: VEL), (“Velocity” or the “Company”), a leader in business purpose loans, today announced the issuance of $75 million principal amount of five-year senior secured notes (the ”Notes”) by Velocity Commercial Capital, LLC, a wholly-owned subsidiary of Velocity. The Notes will bear interest at 9.875% per annum and will mature on February 15, 2029. Interest on the notes will be payable semi-annually on May 15 and November 15 of each year, beginning on May 15, 2024. The Notes are secured on a pari passu basis with Velocity’s $215,000,000 outstanding principal amount of 7.125% Senior Secured Notes due 2027.

The Notes settled on February 5, 2024, and the net proceeds will be used to originate new investments and for general corporate and other working capital purposes.

Piper Sandler & Co. acted as placement agent for the offering.

Mark R. Szczepaniak, CFO, stated, “This transaction marks another successful corporate debt offering, made possible by the Company’s continued strong financial performance and growth in our investment portfolio. We expect this capital to be accretive to earnings as we work to attain our '5x25' goal ($5 billion portfolio by 2025). The Notes are structured with flexibility to continue issuing additional series of similar notes, allowing us to continue building a laddered corporate debt maturity schedule. I would like to thank the Piper Sandler team for leading another successful transaction for Velocity.”

The Notes have not been and will not be registered under the United States Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state laws. This news release does not constitute an offer to sell, or a solicitation of an offer to buy, any securities of the Company in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Forward-Looking Statements

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