In addition to the other information included or
incorporated by reference in this prospectus supplement and the accompanying prospectus, including the matters addressed under
“Forward-Looking Statements,” you should carefully consider the following risks before
investing in the notes. You should also read the risk factors and other cautionary statements, including those described under the sections entitled
“Risk Factors” and
“Legal Proceedings” in OMH’s and OMFC’s combined Annual Report on Form 10-K for the year ended
December 31, 2022, and OMH’s and OMFC’s combined Quarterly Report on Form 10-Q for the quarter ended
March 31, 2023, which are
incorporated by reference in this prospectus supplement and the accompanying prospectus.
We are subject to certain risks and hazards due to the nature of the business activities we conduct. The risks discussed below and
incorporated
by reference in this prospectus supplement and the accompanying prospectus, any of which could materially and adversely affect our business, financial condition, liquidity, results of operations and prospects, are not the only risks we face. We may experience additional risks and uncertainties not currently known to us or, as a result of developments occurring in the future, conditions that we currently deem to be immaterial may also materially and adversely affect our business, financial condition, liquidity, results of operations and prospects.
Risks Related to the Notes
If current market conditions or our financial performance
deteriorates, we may not be able to generate sufficient cash to service all of our indebtedness, including the notes offered hereby, and we may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.
Our ability to make scheduled payments or to refinance our debt obligations, including the notes offered hereby, depends on our financial and operating performance, which is subject to prevailing economic and competitive conditions, which may deteriorate in the future, and to certain financial, business and other factors beyond our control.
At
March 31, 2023, after giving effect
to (i) this offering, (ii) the OMFC Net Debt Increase and (iii) the May 2023 dividend payment, OMH would have approximately $1.6 billion and OMFC would have approximately $1.6 billion of cash and cash equivalents. See
“OMH Capitalization” and
“OMFC Capitalization.” During the three months ended
March 31, 2023, OMH and OMFC each generated net income of $179 million, respectively. During the year ended
December 31, 2022, OMH and OMFC each generated net income of $878 million, respectively. OMH’s net cash inflows from operating and investing activities totaled $358 million for the three months ended
March 31, 2023, and $268 million for the year ended
December 31, 2022. OMFC’s net cash inflows from operating and investing activities totaled $358 million for the
three months ended
March 31, 2023, and $269 million for the year ended
December 31, 2022. We intend to support our liquidity position by pursuing additional debt financings (including new securitizations and new debt issuances, debt refinancing transactions and standby funding facilities), or a combination of the foregoing.
We cannot give any assurance that we would be able to take any of these actions, that these actions would be successful even if undertaken, that these actions would permit us to meet our scheduled debt obligations, or that these actions would be permitted under the terms of our existing or future debt agreements. In the absence of sufficient cash resources, we could face substantial liquidity problems and
might be required to dispose of material assets or operations to meet our debt and other obligations.
Further, our ability to refinance our debt on attractive terms or at all, as well as the timing of any refinancings, depends upon a number of factors over which we have little or no control, including general economic conditions, such as unemployment levels, housing markets and interest rates, disruptions in the financial markets, the market’s view of the quality, value, and liquidity of our assets, our current and potential future earnings and cash flows, and our credit ratings. In addition, any financing, particularly any securitization, that is reviewed by a rating agency is subject to the rating agency’s view of the quality and value of any assets supporting such financing, our processes to generate cash flows from, and
monitor the status of, such assets, and changes in the methodology used by the rating agencies to review and rate the applicable financing. This process may require significant time and effort to complete and may not result in a favorable rating or any rating at all, which could reduce the effectiveness of such financing or render it unexecutable.
If we cannot make scheduled payments on our debt, we will be in default and as a result our debt holders could declare all outstanding principal and interest to be due and payable, which could also result in an event of default and declaration of acceleration under certain of our other debt agreements.