UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): ~~November 23~~December 31, 2020 (~~November~~December 2031, 2020)

FRONT YARD RESIDENTIAL CORPORATION

(Exact name of Registrant as specified in its charter)

MARYLAND

001-35657

46-0633510

(State or other jurisdiction of

incorporation or organization)

(Commission

File Number)

(I.R.S. Employer

Identification No.)

~~c/o~~5100 ~~Altisource~~Tamarind ~~Asset~~Reef ~~Management~~Christiansted, ~~Corporation~~United States Virgin Islands 00820 (Address of principal executive offices including zip code)

5100 Tamarind Reef

Christiansted, United States Virgin Islands 00820

(Address of principal executive offices including zip code)

(340) 692-0525

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☒	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange

on which registered

Common stock, par value $0.01 per share

RESI

New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).:

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 18.01. ~~Entry~~Other ~~into a Material Definitive Agreement~~Events.

On ~~November~~October 2022, 2020, Front Yard Residential Corporation, ~~a Maryland corporation~~ (the “Company”), ~~Pretium~~filed ~~Midway~~a ~~Holdco,~~Form ~~LP,~~8-K awith ~~Delaware~~the ~~limited~~Securities ~~partnership~~and Exchange Commission (the “~~Parent~~SEC”), ~~and~~in ~~Midway~~connection ~~AcquisitionCo~~with ~~REIT,~~the aproposed ~~Maryland~~acquisition ~~real~~of ~~estate~~Front ~~investment~~Yard ~~trust~~Residential Corporation (the “~~Merger~~Company” ~~Sub~~or “Front Yard”) ~~entered~~by ~~into~~Pretium ~~the~~Midway ~~First~~Holdco, ~~Amendment~~LP (~~the~~ “~~Amendment~~Parent”) pursuant to ~~that~~an ~~certain~~ Agreement and Plan of Merger, dated as of October 19, 2020 (the “~~Merger~~Original Agreement”), as amended by the First Amendment to Agreement and Plan of Merger, dated as of November 20, 2020 (the “Amendment” and, together with the ~~Amendment~~Original Agreement, the “~~Amended~~ Merger Agreement”), by and among the Company, Parent and Midway AcquisitionCo REIT (“Merger Sub”), a wholly-owned subsidiary of Parent. On November 23, 2020, the Company filed with the SEC its preliminary proxy statement on Schedule 14A and on December 8, 2020, the Company filed with the SEC its definitive proxy statement on Schedule 14A relating to the special meeting of stockholders of the Company scheduled to be held on January 6, 2021 (the “Definitive Proxy Statement”) to, among other things, vote on a proposal to approve the merger of the Company with and into Merger Sub (the “Merger”) with Merger Sub surviving the Merger as a wholly-owned subsidiary of Parent.

~~The~~Since ~~Amended~~the ~~Merger~~initial ~~Agreement~~filing ~~increases~~of the ~~merger~~preliminary ~~consideration~~proxy ~~payable~~statement toon ~~holders~~Schedule of14A, five actions (collectively, the ~~Company’s~~“Front ~~common~~Yard ~~stock,~~Stockholder ~~par~~Actions”) ~~value~~have ~~$0.01~~been ~~per~~filed ~~share~~in ~~(the~~federal ~~“Company~~courts ~~Shares”~~in Delaware, New York and ~~each,~~Georgia aby ~~“Company~~purported ~~Share”).~~Front ~~Pursuant~~Yard tostockholders in connection with the ~~Amended~~transactions contemplated by the Merger Agreement: Wang v. Front Yard Residential Corporation, ~~holders~~et ofal., ~~Company~~Case ~~Shares~~No. ~~will~~1:99-mc-09999 ~~now~~(D. ~~receive~~Del. Nov. 24, ~~for~~2020) ~~each~~(the ~~Company~~“Wang ~~Share~~Action”); ~~held~~Braunstein v. Front Yard Residential Corporation, ~~$16~~et al.25, inCase ~~cash~~No. 1:20-cv-10110 (S.D.N.Y. Dec. 2, ~~without~~2020); ~~interest~~Long v. ~~Prior~~Front toYard ~~entering~~Residential ~~into~~Corporation, ~~the~~et ~~Amended~~al., ~~Merger~~Case ~~Agreement~~No. 1:20-cv-01668-UNA (D. Del. Dec. 8, 2020) (the ~~merger~~“Long ~~consideration~~Action”); ~~payable~~Klein tov. ~~each~~Whitfield, ~~holder~~et ofal., ~~Company~~Case ~~Shares~~No. ~~for~~1:20-cv-10485 ~~each~~(S.D.N.Y. ~~share~~Dec. ~~held~~11, ~~was~~2020); ~~$13~~and Kearny v.50 inFront ~~cash~~Yard Residential Corporation, ~~without~~et ~~interest~~al., ~~The~~Case ~~Amendment~~No. ~~also~~1:20-mi-99999-UNA ~~increases~~(N.D. ~~the~~Ga. ~~termination~~Dec. ~~fee~~24, ~~payable~~2020). byEach of the ~~Company~~Front inYard ~~connection~~Stockholder ~~with~~Actions ~~the~~names ~~termination~~Front ofYard ~~the~~and ~~Merger~~its ~~Agreement~~directors ~~under~~as ~~specified circumstances~~defendants, ~~including~~and in the ~~event~~Wang ~~the~~Action ~~Company’s~~and ~~board~~the ofLong ~~directors~~Action ~~makes~~name aParent ~~Change~~as inan ~~Recommendation~~additional ~~(as~~defendant. ~~defined~~Each inof the ~~Merger~~Front ~~Agreement)~~Yard Stockholder Actions alleges, ~~and~~among other things, that the ~~termination~~Definitive ~~fee~~Proxy ~~payable~~Statement byon ~~Parent~~Schedule in14A is ~~connection~~false ~~with~~and misleading and/or omits material information concerning the ~~termination~~transactions ofcontemplated by the Merger Agreement ~~under~~in ~~specified~~violation ~~circumstances,~~of ~~from~~Sections ~~$24 million~~14(a) toand ~~$40.245 million.~~20(a) ~~The~~of ~~Amendment~~the ~~also~~Securities ~~removes~~Exchange Act of 1934, as amended (the “~~burdensome~~Exchange ~~condition~~Act”), ~~limitation~~and ~~with~~Rule 14a-9 promulgated ~~respect~~under tothe ~~Parent’s~~Exchange ~~obligation~~Act. toThe ~~obtain~~plaintiffs ain ~~consent~~the toFront ~~the~~Yard ~~transaction~~Stockholder ~~under~~Actions, ~~the~~among ~~Company’s~~other ~~credit~~things, ~~facility~~seek ~~with~~to enjoin the ~~Federal~~transactions ~~Home~~contemplated ~~Loan~~by ~~Mortgage~~the ~~Corporation~~Merger Agreement and ~~the~~an ~~related~~award ~~termination~~of ~~fee~~attorneys’ fees and expenses.

~~All~~SUPPLEMENT ~~other~~TO ~~material~~DEFINITIVE ~~terms~~PROXY ofSTATEMENT ~~the Merger Agreement, which was previously filed by the Company as Exhibit 2.1 to the Current Report on Form 8-K dated October 22, 2020, remain the same.~~

~~The~~This ~~foregoing~~supplemental ~~description~~information ofshould ~~the~~be ~~Amendment~~read ~~does~~in ~~not~~conjunction ~~purport~~with tothe beDefinitive ~~complete~~Proxy ~~and~~Statement, iswhich ~~qualified~~should be read in its entirety. byPage references in the ~~terms~~below ~~and~~disclosures ~~conditions~~are ofto pages in the ~~Amendment~~Definitive Proxy Statement, and ~~any~~defined ~~related~~terms ~~agreements~~used but not defined herein have the meanings set forth in the Definitive Proxy Statement. ~~The~~To ~~Amendment~~the ~~has~~extent ~~been~~the ~~attached~~following toinformation ~~provide~~differs ~~investors~~from or conflicts with the information ~~regarding~~contained ~~its~~in ~~terms.~~the ItDefinitive isProxy ~~not~~Statement, ~~intended~~the toinformation ~~provide~~set ~~any~~forth ~~other~~below ~~factual~~shall be deemed to supersede the respective information ~~about~~in the Definitive Proxy Statement. The Company, ~~Parent~~denies orthe ~~any~~allegations ~~other~~in ~~party~~the complaints related to the ~~Amendment~~Front Yard Stockholder Actions and denies any alleged violations of law or any legal or equitable duty. Without admitting in any way that the disclosures below are material or otherwise required by law, the Company makes the following amended and supplemental disclosures solely for the purpose of mooting the allegations in the complaints related ~~agreement~~to the Front Yard Stockholder Actions.

~~A copy of the Amendment is filed with this Current Report on Form 8-K as Exhibit~~ 2.1 ~~and is incorporated herein by reference, and the foregoing description of the Amendment is qualified in its entirety by reference thereto.~~

~~Item~~The ~~8.01.~~section ~~Other~~of ~~Items.~~the Definitive Proxy Statement entitled “THE MERGER—Certain Financial Projections Utilized in Connection with the Merger” is amended and supplemented as follows:

OnThe ~~November 23,~~disclosure ~~2020,~~on ~~the~~page ~~Company~~40 ~~issued~~of athe ~~press~~Definitive ~~release~~Proxy ~~announcing~~Statement ~~that~~is itamended ~~had~~and ~~entered~~supplemented ~~into~~by ~~the~~deleting ~~Amendment following~~ the ~~receipt~~table byat the ~~Company~~end of anthe ~~unsolicited~~fourth ~~binding~~full ~~proposal~~paragraph ~~from~~and anreplacing ~~unaffiliated~~it ~~third~~with ~~party~~the tofollowing ~~acquire~~new ~~all~~table ~~outstanding~~at ~~Company~~the ~~Shares.~~end ~~A copy~~ of the ~~press~~fourth ~~release~~full isparagraph ~~included as Exhibit 99.1 to this Current Report~~ on ~~Form~~such ~~8-K.~~page:

Forward-Looking Statements


($ in millions)	Q4 2020E			2021E			2022E			2023E			2024E
Rental NOI⁽¹⁾	$	34		$	146		$	159		$	166		$	174
G&A expenses		(5	)		(31	)		(32	)		(33	)		(34	)
Asset management expenses		(2	)		—			—			—			—
Adjusted EBITDA	$	27		$	115		$	127		$	133		$	140
Recurring capex		(4	)		(18	)		(17	)		(17	)		(16	)
Leasing commission		(1	)		(2	)		(2	)		(2	)		(2	)
Acquisition capex (net of disposition)		4			(73	)		(10	)		—			—
Other one-time capex		(3	)		(7	)		(5	)		(4	)		(3	)
Free cash flow	$	23		$	15		$	93		$	111		$	119

($ in millions)	2020E			2021E			2022E			2023E
Core revenue	$	217		$	233		$	251		$	262
Core property operating expenses		(84	)		(88	)		(92	)		(96	)
Rental NOI⁽¹⁾	$	132		$	146		$	159		$	166
Normalized G&A		(17	)		(31	)		(32	)		(33	)
Management fees		(13	)		—			—			—
Cash interest expenses		(61	)		(58	)		(57	)		(58	)
REO and other operating expenses		(1	)		(0	)		—			—
Core FFO⁽²⁾	$	40		$	57		$	69		$	76
Recurring capital expenditures		(19	)		(18	)		(17	)		(17	)
Leasing commission		(3	)		(2	)		(2	)		(2	)
AFFO⁽³⁾	$	18		$	37		$	50		$	57

~~This~~The ~~Form~~section ~~8-K contains forward-looking statements within the meaning~~ of ~~Section 27A of~~ the ~~Securities~~Definitive ~~Act~~Proxy ofStatement ~~1933,~~entitled as“THE ~~amended,~~MERGER—Opinion ~~and Section 21E~~ of ~~the~~Deutsche Bank Securities ~~Exchange~~Inc.” ~~Act~~is ~~of 1934, as~~ amended, ~~regarding management’s beliefs, estimates, projections, anticipations~~ and ~~assumptions~~supplemented ~~with~~as ~~respect~~follows: ~~to, among other things, the Company’s financial results, future operations, business plans and investment~~

~~strategies~~The asdisclosure ~~well~~on aspage ~~industry~~46 and market conditions. These statements may be identified by words such as “anticipate,” “intend,” “expect,” “may,” “could,” “should,” “would,” “plan,” “estimate,” “target,” “seek,” “believe” and other expressions or words of ~~similar meaning. We caution that forward-looking statements are qualified by~~ the ~~existence~~Definitive ofProxy ~~certain~~Statement ~~risks~~is ~~and~~amended ~~uncertainties that could cause actual results~~ and ~~events~~supplemented ~~to differ materially from what is contemplated~~ by ~~the~~adding ~~forward-looking statements. These risks and uncertainties include:~~ the ~~occurrence~~following ~~of any event, change or other circumstances that could give rise~~ to the termination of the merger agreement; the inability to complete the proposed merger due to the failure to obtain stockholder approval for the proposed merger or the failure to satisfy other conditions to completion of the proposed merger; risks related to disruption of management’s attention from the Company’s ongoing business operations due to the transaction; the effect of the announcement of the proposed merger on the Company’s relationships with its customers, operating results and business generally; the risk that the proposed merger will not be consummated in a timely manner; exceeding the expected costs of the merger; our ability to successfully complete the transition plan contemplated in connection with the termination of our Asset Management Agreement with Altisource Asset Management Corporation (“AAMC”), our external asset manager, pursuant to the Termination and Transition Agreement dated August 13, 2020; our ability to successfully internalize our asset management function; our ability to successfully implement our strategic initiatives and achieve their anticipated impact; our ability to implement our business strategy; risks and uncertainties related to the COVID-19 pandemic, including the potential adverse impact on our real-estate related assets, financing arrangements, operations, business prospects, customers, employees and third~~-party~~ ~~service~~paragraph providers; the effect of management’s attention being diverted from our ongoing business operations and costs associated with shareholder activism; the impact of defending any litigation; our ability to make distributions to stockholders; our ability to integrate newly acquired rental assets into the portfolio; the ability to successfully perform property management services at the level and/or the cost that we anticipate; the failure to identify unforeseen expenses or material liabilities associated with acquisitions through the due diligence process prior to such acquisitions; difficulties in identifying single-family properties to acquire; the impact of changes to the supply of, value of and the returns on single-family rental properties; our ability to acquire single-family rental properties generating attractive returns; our ability to sell non-core assets on favorable terms or at all; our ability to predict costs; our ability to effectively compete with competitors; changes in interest rates; changes in the market value of single-family properties; our ability to obtain and access financing arrangements on favorable terms or at all; our ability to deploy the net proceeds from financings or asset sales to acquire assets in a timely manner or at all; our ability to maintain adequate liquidity and meet the requirements under our financing arrangements; risks related to our engagement of AAMC as our asset manager; the failure of our third party vendors to effectively perform their obligations under their respective agreements with us; our failure to qualify or maintain qualification as a REIT; our failure to maintain our exemption from registration under the Investment Company Act of 1940, as amended; the results of our strategic alternatives review and risks related thereto; the impact of adverse real estate, mortgage or housing markets; the impact of adverse legislative, regulatory or tax changes and other risks and uncertainties detailed in the “Risk Factors” and other sections described from time to time in the Company’s current and future filings with the Securities and Exchange Commission (“SEC”). In addition, financial risks such aspage: ~~liquidity, interest rate and credit risks could influence future results. The foregoing list of factors should not be construed as exhaustive.~~

~~Forward-looking~~• ~~statements~~Deleting ~~speak only as of~~ the ~~date~~phrase ~~hereof~~“using ~~and,~~perpetuity ~~except~~growth asrates ~~required~~ranging byfrom ~~law,~~2.75% ~~we undertake no obligation~~ to ~~update~~3.25%” orimmediately ~~revise~~following ~~these~~the ~~forward-looking~~phrase ~~statements.~~“Front ~~For~~Yard’s ~~additional~~Terminal ~~information~~Values ~~regarding~~were ~~these~~calculated” and ~~other~~adding ~~risks~~the ~~faced~~phrase “by ~~us,~~applying ~~refer~~perpetuity togrowth ~~our~~rates ~~public~~ranging ~~filings~~from ~~with~~2.75% to 3.25% to the ~~SEC,~~projected ~~available~~free oncash ~~the~~flow ~~Investors~~in ~~section~~2024 of ~~our~~$119 ~~website~~million” atimmediately ~~www.frontyardresidential.com~~following ~~and~~the onphrase ~~the~~“Front ~~SEC~~Yard’s ~~website~~Terminal ~~at www.sec.gov.~~Values were calculated” of such paragraph;

~~Item~~3 ~~9.01 Financial Statements and Exhibits~~

• Deleting the phrase “and (diii)” ~~Exhibits~~immediately following the phrase “Front Yard’s after-tax cost of debt” and adding the phrase “of 3.5%, (iii) Front Yard’s net debt as of September 30, 2020 of $1,516 million and (iv)” immediately following the phrase “Front Yard’s after-tax cost of debt” of such paragraph.

2.1		First Amendment to Agreement and Plan of Merger, dated November 20, 2020, by and among Front Yard Residential Corporation, Pretium Midway Holdco, LP and Midway AcquisitionCo REIT
99.1		Press Release, dated November 23, 2020

The disclosure on page 48 of the Definitive Proxy Statement is amended and supplemented by deleting the sixth paragraph on such page and replacing it with the following:

~~EXHIBIT~~“Deutsche ~~INDEX~~Bank chose a range of premia from 10% to 20% and applied these to the closing price of the Front Yard Shares as of October 16, 2020, the trading day prior to the initial announced transaction with the Buyer Group, which results in a range of implied prices per share of Front Yard Shares of $10.96 to $11.95 per share.”

ExhibitNo.		Description
2.1		First Amendment to Agreement and Plan of Merger, dated November 20, 2020, by and among Front Yard Residential Corporation, Pretium Midway Holdco, LP and Midway AcquisitionCo REIT
99.1		Press Release, dated November 23, 2020
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

The disclosure on page 49 of the Definitive Proxy Statement is amended and supplemented by adding the following to the first paragraph on such page:

•

Adding the phrase “which was 10.6x” immediately following the phrase “with Pretium on October 19, 2020” of such paragraph;

•

Deleting the word “indicating” immediately following the phrase “using a discount rate of 12.5%,” and adding the phrase “which was chosen by Deutsche Bank based on its professional judgment and experience, reflecting” of such paragraph.

The disclosure on pages 50-51 of the Definitive Proxy Statement is amended and supplemented by deleting the fifth sentence of the third full paragraph on page 50 and replacing it with the following:

“In the past two years, Deutsche Bank has provided investment banking services, M&A financial advisory and equity and debt capital markets services to Front Yard and the Buyer Group or their respective affiliates for which Deutsche Bank has received compensation of less than $5 million for services provided to Front Yard and less than $50 million for services provided to the Buyer Group.”

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, ~~hereunto~~thereunto duly authorized.

Front Yard Residential Corporation

November 23, 2020

/s/ Robin N. Lowe

December 31, 2020

/s/ Robin N. Lowe

Robin N. Lowe Chief Financial Officer

Filing Compare · Front Yard Residential Corp