Fitch downgraded Finance of America to restricted default due to a distressed debt exchange, which significantly reduced contractual terms to avert imminent default.
The exchange agreement helped FOA avoid default by extending debt maturities to 2026, enhancing financial flexibility, despite maintaining a weak liquidity profile.
Despite the recent upgrade, FOA's position remains constrained by its liquidity challenges, although its established market presence and management are supportive factors.
Fitch anticipates improved earnings and profitability for FOA as a stronger interest rate environment could increase mortgage originations, benefiting the company's financial health.
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