New Residential Announces Acquisition of Mortgage Servicing Assets &
Investor Call to Discuss Acquisition
NEW YORK -- December 18, 2013
New Residential Investment Corp. (NYSE:NRZ, the “Company”) announced today
that the Company and other third-party co-investors (collectively, “Buyer”)
agreed to acquire approximately $3.2 billion of servicing advances from
Nationstar Mortgage LLC (“Nationstar”). The advances relate to non-Agency
residential mortgage loans with an unpaid principal balance of approximately
The total purchase price is approximately $3.2 billion^(1), excluding working
capital, and will be funded with 90% debt and 10% equity. The Buyer assumed
two servicing advance debt facilities transferred from Nationstar, and will
finance this acquisition by utilizing a portion of those facilities. New
Residential will fund its pro rata share of the equity, which is approximately
$0.2 billion, using cash on hand. The Buyer has agreed to make future advances
related to the underlying loans.
The investment is expected to generate a stable 14% return^(2) for the Buyer,
with the potential for upside. The Buyer’s return will be supported by the
servicing cash flows related to the $58 billion of underlying loans.
Nationstar will continue to service the loans in exchange for a servicing fee
plus the ability to earn performance compensation. Nationstar will also retain
all ancillary, Solutionstar and originations income related to the loans.
Furthermore, the Buyer has the right, but not the obligation, to acquire
Nationstar’s remaining non-Agency advances on substantially the same terms as
this acquisition, subject to certain conditions. Nationstar currently has
approximately $3.1 billion of remaining advances related to $72 billion of
New Residential Chief Executive Officer, Michael Nierenberg, commented "The
servicing advances acquired through this acquisition are highly complementary
to our current stable of servicing related assets. We continue to believe that
our robust portfolio of servicing related assets, non-Agency RMBS, consumer
loans and other related investments positions us well to generate strong
returns for our shareholders."
Houlihan Lokey acted as a financial advisor to the Company in connection with
Of the total approximately $3.2 billion of servicing advances, $2.4
^1 billion of advances were funded on December 17, 2013, and the remaining
$0.8 billion are anticipated to be fully funded by mid-January, subject
to various conditions.
^2 Please refer to Forward Looking Statements below.
For additional information that management believes to be useful for
investors, please refer to the presentation posted on the Investor Relations
section of the Company’s website, www.newresi.com.
New Residential’s management will host a live call today at 10:00 AM Eastern
Time to discuss the acquisition.
All interested parties are welcome to participate on the live call. The call
may be accessed by dialing 1-866-393-1506 (from within the U.S.) or
1-706-634-0623 (from outside of the U.S.) ten minutes prior to the scheduled
start of the call; please reference “New Residential Investor Call.”
A telephonic replay of the call will also be available two hours following the
call’s completion through 11:59 P.M. Eastern Time on Tuesday, December 31,
2013 by dialing 1-855-859-2056 (from within the U.S.) or 1-404-537-3406 (from
outside of the U.S.); please reference conference code “25676811.”
ABOUT NEW RESIDENTIAL
New Residential focuses on opportunistically investing in, and actively
managing, investments related to residential real estate. The Company
primarily targets investments in: (1) mortgage servicing related assets, (2)
residential mortgage backed securities (“RMBS”), (3) residential mortgage
loans and (4) other related investments. New Residential is organized and
conducts its operations to qualify as a real estate investment trust (“REIT”)
for federal income tax purposes. The Company is managed by an affiliate of
Fortress Investment Group LLC, a global investment management firm.
Certain statements in this press release may constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995, including without limitation references to a stable 14% return with
the potential for upside expected to be generated by the acquisition described
in this press release and the Company’s ability to deliver strong returns to
stockholders. These statements are based on management's current expectations
and beliefs and are subject to a number of trends and uncertainties that could
cause actual results to differ materially from those described in the
forward-looking statements, many of which are beyond our control. The Company
can give no assurance that its expectations will be attained. Accordingly, you
should not place undue reliance on any forward-looking statements contained in
this press release. For a discussion of some of the risks and important
factors that could affect such forward-looking statements, see the sections
entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial
Condition and Results of Operation” in the Company’s Quarterly Report on Form
10-Q, which is available on the Company’s website (www.newresi.com). In
addition, new risks and uncertainties emerge from time to time, and it is not
possible for the Company to predict or assess the impact of every factor that
may cause its actual results to differ from those contained in any
forward-looking statements. Such forward-looking statements speak only as of
the date of this press release. The Company expressly disclaims any obligation
to release publicly any updates or revisions to any forward-looking statements
contained herein to reflect any change in the Company's expectations with
regard thereto or change in events, conditions or circumstances on which any
statement is based.
New Residential Investment Corp.
Investor Relations, 212-479-3150
Press spacebar to pause and continue. Press esc to stop.