SCHEDULE 13D/A: PIMCO Extends Velocity Financial Warrants to Facilitate HSR Act Compliance

Pacific Investment Management Company LLC (PIMCO) has extended the expiration date of its warrants in Velocity Financial, Inc. by one month to May 7, 2025, to allow for additional time to comply with Hart-Scott-Rodino antitrust regulations.

Summary

• Pacific Investment Management Company LLC (PIMCO), through TOBI, beneficially owns 12,637,764 shares of Velocity Financial, Inc. Common Stock.
• This ownership represents 35.4% of the Issuer's class of securities.
• The total beneficial ownership includes 10,963,806 shares of Common Stock and 1,673,958 shares of Common Stock acquirable through the exercise of Warrants.
• The percentage calculation is based on 34,015,492 outstanding shares of Common Stock as of March 3, 2025, plus the 1,673,958 Warrant Shares.
• On March 6, 2025, TOBI and Velocity Financial, Inc. agreed to extend the expiration date of the Warrants from April 7, 2025, to May 7, 2025.
• The purpose of this extension is to provide additional time, if needed, to comply with the Hart-Scott-Rodino Antitrust Improvement Acts of 1976, as amended.
• PIMCO intends to exercise the Warrants on or prior to the extended expiration date if they are in-the-money.

Sentiment

Score: 6

Explanation: The sentiment is moderately positive as the extension facilitates a planned transaction by a major investor, indicating continued interest and potential for increased stake, despite the procedural delay for regulatory compliance.

Positives

• The extension of the warrant expiration date provides PIMCO with additional flexibility and time to complete the necessary regulatory compliance (HSR Act) before exercising the warrants.
• PIMCO's stated intent to exercise the warrants if they are in-the-money indicates continued confidence in Velocity Financial, Inc. and a potential increase in their significant stake.

Negatives

• The need for an extension due to HSR Act compliance suggests that the potential warrant exercise and resulting increase in PIMCO's stake is a significant transaction that requires regulatory scrutiny, which could introduce unforeseen delays or conditions.

Risks

• Potential delays or complications in obtaining Hart-Scott-Rodino Antitrust Improvement Acts of 1976 clearance, which could impact the timing or feasibility of the warrant exercise.
• The Warrants may not be in-the-money by the extended expiration date of May 7, 2025, which would affect PIMCO's decision to exercise them.

Future Outlook

Pacific Investment Management Company LLC intends to exercise its Warrants in Velocity Financial, Inc. on or prior to the new expiration date of May 7, 2025, provided the Warrants are in-the-money. This action is contingent on, or facilitated by, compliance with the Hart-Scott-Rodino Antitrust Improvement Acts.

Industry Context

This filing reflects a significant investment position by a major asset manager (PIMCO) in a financial services company (Velocity Financial, Inc.). The need for HSR Act compliance suggests that PIMCO's potential increase in ownership could trigger antitrust review thresholds, indicating a substantial transaction in the financial sector.

Stakeholder Impact

• Shareholders of Velocity Financial, Inc. may view PIMCO's continued commitment and potential increase in ownership as a positive signal regarding the company's prospects.
• The potential exercise of warrants could lead to an increase in the number of outstanding shares, which might have a dilutive effect on existing shareholders, though this is already factored into the beneficial ownership percentage calculation.

Next Steps

• Pacific Investment Management Company LLC (PIMCO) will continue efforts to comply with the Hart-Scott-Rodino Antitrust Improvement Acts of 1976.
• PIMCO intends to exercise the Warrants on or prior to May 7, 2025, if they are in-the-money.

Key Dates

Keywords

Velocity Financial Inc., Pacific Investment Management Company LLC, PIMCO, Schedule 13D, Warrants, Hart-Scott-Rodino Act, HSR Act, Beneficial Ownership, Common Stock, Investment, Regulatory Compliance