SEC Filing Summary: New Residential Investment Corp. (NRZ)
Business Context and Reporting Period
This Form 8-K was filed on July 2, 2019, by New Residential Investment Corp. (NRZ), a Delaware corporation and Real Estate Investment Trust (REIT). The filing reports the designation of a new class of preferred stock to modify the rights of security holders.
Key Financial Metrics and Capital Structure
The filing details the creation of 6,210,000 shares of 7.50% Series A Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock. Key terms include:
- Liquidation Preference: $25.00 per share.
- Dividend Rate (Fixed): 7.50% per annum ($1.875 per share) from July 2, 2019, through August 14, 2024.
- Dividend Rate (Floating): Three-month LIBOR plus 5.802% per annum, effective August 15, 2024.
- Payment Schedule: Quarterly cumulative cash dividends payable on or about February 15, May 15, August 15, and November 15.
- Seniority: Ranks senior to common stock regarding dividends and liquidation rights.
Note: This filing does not provide specific revenue, profit, cash flow, or total debt figures for the company.
Material Changes
The primary material change is the authorization of the Series A Preferred Stock, which alters the company's capital structure and dividend obligations. The stock is not redeemable prior to August 15, 2024, except under limited circumstances to preserve REIT status or upon a Change of Control.
Outlook, Risks, and Contingencies
- Redemption Rights: The company may redeem the stock on or after August 15, 2024, at $25.00 per share plus accrued dividends. Redemption is also permitted within 120 days of a Change of Control.
- Conversion Rights: Upon a Change of Control, holders may convert preferred shares into common stock based on a formula, subject to the company's prior election to redeem.
- Voting Rights: Holders generally have no voting rights unless dividends are unpaid for six or more full quarterly periods.
- REIT Compliance: Ownership restrictions are in place to ensure the company maintains its qualification as a REIT for U.S. federal income tax purposes.
Investor Verification Checklist
- Verify the total capital raised from the issuance of the 6,210,000 Series A Preferred shares (not explicitly stated in this text).
- Confirm the company's current liquidity position to ensure it can meet the new quarterly dividend obligations.
- Review the full Certificate of Designations (Exhibit 3.4) for detailed conversion formulas and Change of Control definitions.
- Assess the impact of the floating rate mechanism post-2024 on future interest expense relative to current LIBOR trends.