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Nationstar and New Residential ink servicing advance deal

  • Nationstar Mortgage (NSM) advances its plan for a low-cost, capital-light acquisition structure, initially selling $3.2B in servicing advances to New Residential (NRZ) and other investors, with the potential for that amount to rise as high as $6.3B. The advances are for MSRs with UPB of about $58B. The sale price is $3.2B.
  • For Nationstar, the move unlocks $362M of advance equity (with the potential for up to $681M) for redeployment into higher return opportunities.
  • Nationstar will continue to service the loans in the transaction portfolios for a base servicing fee with the potential to earn addition fees based on performance.
  • "We have been working rigorously to evaluate capital structure alternatives for acquisitions to unlock Nationstar's growth potential," says CEO Jay Bray.
  • NSM +2.9% premarket
  • CC at 11 ET
  • Press release
  • Additional coverage (from the New Residential perspective)
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