Rithm Capital, a New York-based asset manager with a focus on real estate — and the parent of multichannel lender Newrez — is the latest company in the mortgage space to issue debt.
Rithm is joining a list that includes competitors Mr. Cooper Group, Freedom Mortgage, PennyMac Mortgage Investment Trust and Pennymac Financial Services, each of which have issued debt since September 2023.
On Monday, Rithm announced its plan to offer $775 million in senior unsecured notes due in 2029 for qualified institutional buyers.
The company said that the proceeds will be used to reduce indebtedness. The debt issuance include a cash tender offer announced Monday to purchase up to $275 million of Rithm’s $550 million in outstanding senior unsecured notes, priced at 6.25% and due in 2025.
The tender offer will expire on April 1 unless it is extended or terminated early by the company.
The remainder of the net proceeds will be used for “general corporate purposes,” the company said in a statement that did not provide further details.
Analysts anticipated that mortgage companies would issue debt in an attempt to improve liquidity and fund their business and investment activities, specifically by targeting mortgage servicing rights (MSR) deals.
Rithm posted $532.7 million in GAAP net income in 2023. Last year was marked by its purchase of consumer loans from Goldman Sachs, as well as the acquisitions of Sculptor Capital Management and Computershare Mortgage Services, including Specialized Loan Servicing (SLS).
In February, the company announced that it would issue a one-year loan, purchase common stock and become the external manager of its peer, Great Ajax Corp.
