Business Context and Reporting Period
This Form 8-K filing by New Residential Investment Corp. (NRZ) reports a material definitive agreement entered into on October 15, 2019. The filing details a financing transaction involving the issuance of receivables-backed term notes by an indirect subsidiary, NRZ Advance Receivables Trust 2015-ON1.
Key Financial Metrics and Transaction Details
- Transaction Size: $400,000,000 in Series 2019-T4 Notes.
- Interest Rates: Fixed rates ranging from 2.3286% to 4.2816% per annum, varying by class.
- Use of Proceeds: Funds were utilized to redeem the Series 2016-T3 Notes.
- Collateral: Secured by servicer advance receivables and accrued servicing fees from subsidiaries PHH Mortgage Corporation, NewRez LLC (Shellpoint), and New Residential Mortgage LLC.
- Revolving Period: Ends on October 15, 2021.
- Amortization: Post-revolving period, the Issuer must repay one-twelfth of the remaining principal balance monthly.
Material Changes and Structure
The issuance of the Series 2019-T4 Notes represents a refinancing of existing debt (Series 2016-T3 Notes). The new notes are cross-collateralized with four other series of outstanding notes previously issued by the Issuer. The transaction was executed under a Third Amended and Restated Indenture dated July 25, 2019, and a specific Indenture Supplement dated October 15, 2019.
Risks, Covenants, and Contingencies
The filing outlines significant risks and covenants associated with the new notes:
- Events of Default: Include failure to meet interest coverage or collateral performance tests, material breaches of transaction documents, non-payment of principal/interest, insolvency of key subsidiaries, or failure to comply with deposit/remittance requirements.
- Consequences of Default: May trigger interest rate increases, rapid amortization, or acceleration of principal repayment. Noteholders may declare obligations immediately due and payable.
- Covenants: Affirmative covenants require maintenance of existence, reporting, and compliance with servicing standards. Negative covenants limit amendments to servicing agreements and methodologies for determining non-recoverable advances.
Note: This filing does not provide specific revenue, profit, cash flow, or liquidity metrics for the reporting period.
Investor Verification Checklist
- Verify the redemption status and terms of the replaced Series 2016-T3 Notes.
- Review the specific interest rate allocation across the different classes of the Series 2019-T4 Notes.
- Assess the current performance of the collateral pool (servicer advance receivables) against the required coverage tests.
- Confirm the cross-collateralization impact on the four other outstanding note series.
- Monitor the revolving period end date (October 15, 2021) for potential liquidity requirements related to monthly amortization.