Business Context and Reporting Period
This Form 8-K Current Report was filed by New Residential Investment Corp. (NRZ) on July 25, 2019. The filing details the entry into a material definitive agreement and the creation of a direct financial obligation. The company operates in the residential mortgage servicing sector, utilizing securitization structures to finance advances and deferred servicing fees.
Key Financial Metrics and Transaction Details
- Transaction Type: Issuance of rated receivables-backed term notes (Series 2019-T1 Notes).
- Principal Amount: $400,000,000.
- Interest Rates: Fixed rates ranging from 2.59% to 4.46% per annum, varying by class.
- Use of Proceeds: Redemption of the Series 2016-T5 Notes.
- Collateral: Secured by servicer advance receivables and accrued servicing fees from subsidiaries (PMC, Shellpoint, NRM). The collateral cross-collateralizes four other outstanding note series.
- Revolving Period: Ends on July 15, 2022.
- Amortization: Post-revolving period, the Issuer must repay one-twelfth of the remaining principal balance monthly.
Material Changes and Agreements
The filing reports the execution of a Third Amended and Restated Indenture on July 25, 2019. This amendment facilitates the continued financing of monthly advances, servicing advances, and deferred servicing fees under private label residential mortgage loan servicing agreements. The new Series 2019-T1 Notes replace the previously issued Series 2016-T5 Notes.
Outlook, Risks, and Covenants
Covenants and Conditions: The definitive documents include affirmative covenants (reporting, maintenance of existence, compliance with laws) and negative covenants (limitations on amendments to servicing agreements and repayment methodologies).
Events of Default: The filing outlines specific triggers for default or target amortization events, including:
- Failure to satisfy interest coverage or collateral performance tests.
- Non-payment of principal or interest.
- Insolvency of key subsidiaries (PMC, HLSS, Shellpoint, NRM).
- Failure to comply with deposit and remittance requirements.
Consequences of Default: Upon an event of default, consequences may include interest rate increases, rapid amortization, or acceleration of principal repayment. Noteholders may declare obligations immediately due and payable.
Management Commentary: The filing text does not provide explicit forward-looking guidance or management commentary beyond the transaction mechanics and standard covenant descriptions.
Investor Verification Checklist
- Verify the specific interest rate allocation across the different classes of the Series 2019-T1 Notes.
- Confirm the current status and performance of the collateral pool (servicer advance receivables) securing the notes.
- Review the terms of the redeemed Series 2016-T5 Notes to understand the refinancing impact on the company's debt maturity profile.
- Monitor the company's ability to meet the interest coverage and collateral performance tests to avoid default triggers.
- Check for any subsequent filings regarding the utilization of the revolving period ending July 15, 2022.