SEC Filing Summary: New Residential Investment Corp. (8-K)
Business Context and Reporting Period
This Form 8-K was filed on July 7, 2016, reporting events occurring on June 30, 2016. The registrant is New Residential Investment Corp. (NRZ), a Delaware corporation. The filing details a material definitive agreement involving a securitization transaction executed by an indirect subsidiary, NRZ Advance Receivables Trust 2015-ON1 (the "Issuer").
Key Financial Metrics and Transaction Details
- Transaction Type: Securitization of receivables-backed term notes.
- Principal Amount: $400,000,000 issued as Series 2016-T1 Notes.
- Interest Rates: Fixed rates ranging from 2.7511% to 5.7670% per annum, varying by class.
- Collateral: Receivables for corporate and escrow advances, principal and interest advances, and accrued servicing fees payable to Ocwen Loan Servicing, LLC.
- Revolving Period: Ends on June 15, 2019.
- Amortization: If notes remain outstanding after the revolving period, the Issuer must repay one-twelfth of the remaining principal balance monthly.
- Cross-Collateralization: The collateral secures the Series 2016-T1 Notes and cross-collateralizes five other series of outstanding notes previously issued by the Issuer.
Note: This filing does not provide consolidated revenue, profit, cash flow, or margin data for the registrant.
Material Changes and Obligations
The primary material change is the creation of a direct financial obligation of $400 million. The transaction includes an amendment to the base indenture dated August 28, 2015, to clarify language regarding permitted amendments. The notes are subject to customary events of default, including failing interest coverage or collateral performance tests, insolvency of Ocwen or the Sponsor, and nonpayment of obligations.
Outlook, Risks, and Contingencies
- Default Consequences: Upon an event of default or target amortization event, the Issuer may face interest rate increases, forced amortization, or acceleration of principal repayment.
- Acceleration Rights: Holders of a requisite percentage of notes may declare obligations immediately due and payable upon default (excluding bankruptcy events, which trigger automatic acceleration).
- Covenants: Affirmative covenants include reporting requirements and maintaining servicing standards. Negative covenants limit amendments to underlying servicing agreements and reimbursement methodologies.
- Investment Company Risk: An event of default occurs if the Issuer becomes subject to registration as an "investment company" under the 1940 Act.
Key Facts for Investor Verification
- Verify the current status of the $400 million Series 2016-T1 Notes and whether the revolving period has concluded.
- Confirm the performance of the underlying collateral (Ocwen advances and servicing fees) to assess default risk.
- Review the impact of the cross-collateralization on the five other series of outstanding notes.
- Monitor compliance with interest coverage and collateral performance tests to avoid acceleration triggers.
- Check for any subsequent amendments to the indenture or underlying servicing agreements that may affect reimbursement procedures.