Rithm Capital Corp. Announces Pricing of Public Offering of Common Stock

Rhea-AI Summary

Rithm Capital Corp. (NYSE: RITM) has announced the pricing of its public offering of 30,000,000 shares of common stock, expecting to raise gross proceeds of approximately $342.9 million. The underwriters have a 30-day option to purchase up to an additional 4,500,000 shares. The offering is set to close on September 26, 2024, subject to customary conditions.

The company plans to use the net proceeds for general corporate purposes. Citigroup, Goldman Sachs & Co. , J.P. Morgan, UBS Investment Bank, BTIG, and Wells Fargo Securities are acting as joint book-running managers for the offering. The shares are being offered through the company's effective shelf registration statement filed with the SEC.

Positive

• Successful pricing of a large public offering, raising approximately $342.9 million in gross proceeds
• Option for underwriters to purchase additional 4,500,000 shares, potentially increasing total proceeds
• Involvement of major financial institutions as joint book-running managers, indicating strong market support

Negative

• Potential dilution of existing shareholders' ownership due to the issuance of 30,000,000 new shares
• Possible downward pressure on stock price due to increased supply of shares in the market

Insights

Financial Analyst

Rithm Capital's public offering of 30 million shares at approximately $11.43 per share is a significant capital raise, bringing in gross proceeds of about $342.9 million. This move suggests the company is looking to strengthen its balance sheet or fund potential growth initiatives. The additional 4.5 million share option granted to underwriters could potentially increase the total raised to nearly $400 million.

The pricing appears to be at a slight discount to the current market price, which is typical for such offerings to ensure full subscription. This dilution might put some short-term pressure on the stock price. However, the successful placement of such a large offering indicates strong institutional interest in Rithm Capital.

The use of proceeds for "general corporate purposes" is vague, leaving investors to speculate on the company's strategic plans. This could range from debt reduction to funding acquisitions or expanding operations. The involvement of major underwriters like Citigroup, Goldman Sachs and J.P. Morgan lends credibility to the offering and suggests confidence in Rithm's prospects.

Investors should watch for how effectively management deploys this capital to generate returns and whether it leads to improved financial performance or strategic positioning in the coming quarters.

Market Research Analyst

This public offering by Rithm Capital is significant in the context of its $5.77 billion market cap, representing about 5.9% dilution (or 7.7% if the overallotment option is fully exercised). The timing of this capital raise is interesting, potentially indicating that management sees attractive investment opportunities in the current market environment.

The real estate investment trust (REIT) sector has faced challenges due to rising interest rates, which makes this successful offering noteworthy. It suggests that investors are still willing to back REITs with strong management and potential for growth, despite broader sector headwinds.

The pricing of the offering will likely set a new near-term benchmark for the stock. Investors should monitor how the stock trades post-offering to gauge market sentiment. Additionally, this capital injection could potentially impact Rithm's dividend policy, a key consideration for REIT investors.

The broad range of underwriters involved indicates wide distribution of the new shares, which could lead to increased liquidity and potentially broader analyst coverage. This might enhance Rithm's visibility in the market and could attract a wider investor base over time.

NEW YORK--(BUSINESS WIRE)-- Rithm Capital Corp. (NYSE: RITM; “Rithm” or the “Company”) announced today that it priced its underwritten public offering of 30,000,000 shares of its common stock for gross proceeds of approximately $342.9 million, before deducting estimated underwriting discounts and commissions and estimated offering expenses. In connection with the offering, the Company has granted the underwriters an option for a period of 30 days to purchase up to an additional 4,500,000 shares of common stock. The underwriters may offer the shares from time to time for sale in negotiated transactions or otherwise, at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices. The offering is expected to close on September 26, 2024, subject to customary closing conditions. The Company intends to use the net proceeds from this offering for general corporate purposes.

Citigroup, Goldman Sachs & Co. LLC, J.P. Morgan, UBS Investment Bank, BTIG and Wells Fargo Securities are acting as joint book-running managers for the offering.

The offering is being made pursuant to the Company’s effective shelf registration statement filed with the Securities and Exchange Commission (the “SEC”). The offering is being made only by means of a prospectus and a related prospectus supplement. Prospective investors should read the prospectus supplement and the prospectus in that registration statement and other documents the Company has filed or will file with the SEC for more complete information about the Company and the offering. You may obtain these documents for free by visiting EDGAR on the SEC’s website at www.sec.gov. Alternatively, copies of the prospectus supplement and the prospectus may be obtained from Citigroup, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, by telephone at (800) 831-9146; Goldman Sachs & Co. LLC, Attention: Prospectus Department, 200 West Street, New York, NY 10282, telephone: 1-866-471-2526, facsimile: 212-902-9316 or by emailing prospectus-ny@ny.email.gs.com; J.P. Morgan Securities, LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717 or by emailing prospectus-eq_fi@jpmchase.com; or UBS Securities LLC, Attention: Prospectus Department, 1285 Avenue of the Americas, New York, NY 10019, or by email at ol-prospectus-request@ubs.com.

This press release does not constitute an offer to sell or the solicitation of an offer to buy shares of common stock, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

ABOUT RITHM CAPITAL CORP.

Rithm Capital Corp. 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 seeks to generate attractive risk-adjusted returns across market cycles and interest rate environments. Since inception in 2013, Rithm has delivered approximately $5.4 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.

FORWARD-LOOKING STATEMENTS

This communication contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements relating to the Company’s ability to complete the offering, the intended use of proceeds of the offering and the expected closing date of the offering. Forward-looking statements are not historical in nature and can be identified by words such as “believe,” “expect,” “anticipate,” “estimate,” “project,” “plan,” “continue,” “intend,” “should,” “would,” “could,” “goal,” “objective,” “will,” “may,” “seek” or similar expressions or their negative forms. Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time and are beyond our control. Forward-looking statements speak only as of the date they are made. Rithm does not assume any duty or obligation (and does not undertake) to update or supplement any forward-looking statements. Because forward-looking statements are, by their nature, to different degrees, uncertain and subject to numerous assumptions, risks and uncertainties, actual results or future events, circumstances or developments could differ, possibly materially, from those that Rithm anticipated in its forward-looking statements, and future results and performance could differ materially from historical performance. Factors that could cause or contribute to such differences include, but are not limited to, those set forth in the section entitled “Risk Factors” in Rithm’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, including any amendments thereto, filed with the SEC, and other reports filed by Rithm with the SEC, copies of which are available on the SEC’s website, www.sec.gov. The list of factors presented here is not, and should not be, considered a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements.

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Rithm

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

How many shares of common stock is Rithm Capital Corp. (RITM) offering in its public offering?

Rithm Capital Corp. (RITM) is offering 30,000,000 shares of common stock in its public offering, with an option for underwriters to purchase an additional 4,500,000 shares.

What are the expected gross proceeds from Rithm Capital's (RITM) public offering?

The expected gross proceeds from Rithm Capital's (RITM) public offering are approximately $342.9 million, before deducting underwriting discounts, commissions, and estimated offering expenses.

When is the closing date for Rithm Capital's (RITM) public offering of common stock?

The closing date for Rithm Capital's (RITM) public offering of common stock is expected to be September 26, 2024, subject to customary closing conditions.

How does Rithm Capital (RITM) plan to use the proceeds from its public offering?

Rithm Capital (RITM) intends to use the net proceeds from the public offering for general corporate purposes.