Rithm Capital Announces the Closing of Securitized Notes Backed by Mortgage Servicing Rights

Rhea-AI Summary

Rithm Capital has successfully closed NZES 2024-FNT1, a $461 million securitized financing note backed by mortgage servicing rights (MSRs). The single-tranche non-recourse transaction provides fixed financing over a 3-year expected life term. The deal was oversubscribed, expanding from an initial $378 million offering size due to strong investor demand. This first-of-its-kind transaction leverages Rithm's scale, strong servicing performance, and high-quality collateral.

Positive

• Successfully closed $461 million MSR-backed securitization
• Deal was oversubscribed, increasing from initial $378 million size
• Strong investor demand demonstrates market confidence
• Non-recourse financing structure reduces company's risk exposure

Negative

• None.

Insights

Financial Analyst

This innovative $461 million MSR-backed securitization represents a significant milestone for Rithm Capital, demonstrating strong market confidence in their mortgage servicing rights portfolio. The deal's oversubscription and 22% upsizing from the initial $378 million offering indicates robust investor demand. The 3-year fixed, non-recourse structure provides Rithm with stable, longer-term financing while reducing refinancing risk.

The transaction enhances Rithm's financial flexibility and validates their MSR portfolio's quality. With rising interest rates making MSRs more valuable, this innovative financing structure could become a template for future deals in the industry. The successful execution also strengthens Rithm's competitive position in the MSR market and could lead to improved financing costs for future transactions.

$461 Million Non-Recourse Fixed Note Offering Represents Another Innovation in MSR Financing

NEW YORK--(BUSINESS WIRE)-- Rithm Capital Corp. (NYSE: RITM, “Rithm Capital” or “Rithm”), a leading sponsor of structured MSR-backed capital market notes, today announced it has successfully closed NZES 2024-FNT1, a $461 million securitized financing note backed by mortgage servicing rights (“MSRs”).

Leveraging Rithm’s scale, strong servicing performance and high-quality collateral, this first-of-its-kind, single-tranche non-recourse transaction provides fixed financing over the term of the expected life of the assets of 3 years. The $461 million transaction was over-subscribed and represents a significant increase from an initial $378 million offering size, driven by strong demand for the securitization’s unique structure and underlying asset portfolio.

“As a pioneer in investing in mortgage servicing rights, Rithm leverages its deep market insights and operating expertise to bring the benefits of this attractive asset class to more investors,” said Michael Nierenberg, Chief Executive Officer of Rithm Capital. “This novel transaction is a testament to the strength and breadth of the Rithm platform and to our attractive portfolio of MSR assets. We are thrilled to see such strong demand for this securitization from a broad range of investors, and we look forward to extending our leadership across the mortgage industry.”

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain information in this press release constitutes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not historical facts. They represent management’s current expectations regarding future events and are subject to a number of trends and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those described in the forward-looking statements. Accordingly, you should not place undue reliance on any forward-looking statements contained herein. For a discussion of some of the risks and important factors that could affect such forward-looking statements, see the sections entitled “Cautionary Statement Regarding Forward Looking Statements,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s most recent annual and quarterly reports and other filings filed with the U.S. Securities and Exchange Commission, which are available on the Company’s website (www.rithmcap.com). New risks and uncertainties emerge from time to time, and it is not possible for Rithm Capital 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. Forward-looking statements contained herein speak only as of the date of this press release, and Rithm Capital expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Rithm Capital's expectations with regard thereto or change in events, conditions or circumstances on which any statement is based.

ABOUT RITHM CAPITAL

Rithm Capital is a global asset manager focused on real estate, credit and financial services. Rithm makes direct investments and operates several wholly-owned operating businesses. Rithm’s businesses include Sculptor Capital Management, Inc., an alternative asset manager, as well as Newrez LLC and Genesis Capital LLC, leading mortgage origination and servicing platforms. Rithm Capital seeks to generate attractive risk-adjusted returns across market cycles and interest rate environments. Since inception in 2013, Rithm has delivered approximately $5.6 billion in dividends to shareholders. Rithm is organized and conducts its operations to qualify as a real estate investment trust (REIT) for federal income tax purposes and is headquartered in New York City.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241114169297/en/

RITHM CAPITAL

Investor Relations

212-850-7770

ir@rithmcap.com

MEDIA

Sarah Salky / Erik Carlson

Joele Frank, Wilkinson Brimmer Katcher

(212) 355-4449

ritm-jf@joelefrank.com

Source: Rithm Capital Corp.

FAQ

What is the size of Rithm Capital's (RITM) 2024 MSR-backed securitization?

Rithm Capital's NZES 2024-FNT1 securitization closed at $461 million, increased from an initial offering size of $378 million due to strong investor demand.

What type of financing structure did Rithm Capital (RITM) use for its 2024 MSR securitization?

Rithm Capital used a first-of-its-kind, single-tranche non-recourse transaction structure that provides fixed financing over a 3-year expected life term.

Was Rithm Capital's (RITM) 2024 MSR securitization successful?

Yes, the securitization was oversubscribed, expanding from $378 million to $461 million due to strong investor demand for its unique structure and underlying asset portfolio.