Figure Technology Solutions has increased its expected initial public offering in both size and price, an updated prospectus filed with the Securities and Exchange Commission said.
The IPO will now consist of 31.5 million shares of its Class A stock, but nearly 4.9 million of those will come from current shareholders in the company. Figure will only get proceeds from the almost 26.65 million shares it is selling.
Previously, approximately 21.46 million shares were being sold by Figure; the number of shares being sold by others, including Mike Cagney and Ribbit Capital IV is unchanged from before.
Because of the voting weight of Class B shares, Cagney and his wife June Ou will control over 72% of Figure once the stock sale is completed, the updated prospectus said.
The price Figure is now expecting for its IPO
The price range has been updated to between $20 and $22 per share from $18 to $20. Expected net proceeds as a result will be $519 million at a $21 per share price point.
Figure has also boosted the underwriters’ overallotment to 4.725 million from 3.95 million. If exercised in full, the net proceeds rise to $612.2 million.
As originally proposed, Figure would have raised just $376.4 million of net proceeds; the overallotment would have grown this to $446.9 million.
Figure works with Longbridge on a senior-specific HELOC
In other news involving Figure, the company is supporting through its tech Longbridge Financial’s rollout of a home equity line of credit product for senior citizens.
HELOC for Seniors is for homeowners 62 and older, using Figure Connect technology. It is a forward mortgage product and the borrower will have to make payments. Longbridge is a lender that focuses on older borrowers, as it offers the Federal Housing Administration-insured Home Equity Conversion Mortgage as well as a proprietary reverse mortgage.
“This partnership reflects a shared commitment to innovation and the opportunity for Figure’s marketplace to unlock capital markets solutions that solve meaningful problems,” said Michael Tannenbaum, CEO of Figure, in the Longbridge press release.
Traditional HELOC products are not designed for people of the 62-and-over age group, so they can’t use it in order to tap the value of their property, said Chris Mayer, CEO of Longbridge.
“Over half of HELOC denials are tied to unaffordable monthly payments, and nearly one-third of seniors today carry mortgage debt into their 70s and 80s,” Mayer said. “We built HELOC for Seniors to offer a better way forward, offering the financial flexibility associated with a line of credit, but without sharply rising payments that come with traditional bank HELOCs, or the higher base payments associated with closed-end second liens.”
What are the terms for the HELOC for seniors?
With this product, which has an interest-only payment feature while the line is in use, borrowers do not have a preset date where the loan is due and payable like a typical HELOC, Longbridge said.
However, the principal becomes due when the borrower permanently leaves the home, as long as they stay current on all required payments, including interest, property taxes and homeowners’ insurance.
Borrowers can draw up to $400,000; each draw is at a fixed-rate set at the time the money is taken out. They can make a maximum of 25 draws over a 10-year period.
