Business Context and Reporting Period
This Form 8-K filing by New Residential Investment Corp. (NRZ) reports a material definitive agreement entered into on August 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
- Debt Issuance: $400,000,000 of Series 2019-T2 Notes.
- Interest Rates: Fixed rates ranging from 2.52% to 4.39% per annum, varying by class.
- Revolving Period: Ends on August 15, 2023.
- Collateral: Secured by servicer advance receivables and accrued servicing fees from subsidiaries PHH Mortgage Corporation, Shellpoint Mortgage Servicing, and New Residential Mortgage LLC.
- Use of Proceeds: Used to redeem the Series 2016-T4 Notes.
The filing text does not provide clear values for revenue, profit, cash flow, margins, or overall liquidity positions beyond the specific transaction details.
Material Changes
The primary material change is the refinancing of existing debt. The Company issued $400 million in new notes to redeem the Series 2016-T4 Notes. The new notes cross-collateralize four other series of outstanding notes previously issued by the Issuer.
Outlook, Risks, and Covenants
Amortization: If the notes remain outstanding after the revolving period ends on August 15, 2023, the Issuer must repay one-twelfth of the remaining principal balance monthly until paid in full.
Events of Default: Include failure to satisfy interest coverage or collateral performance tests, material breaches of transaction documents, non-payment, insolvency of key subsidiaries, or failure to comply with deposit and 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: The agreement includes affirmative covenants (reporting, maintenance of existence, compliance with laws) and negative covenants (limitations on amendments to servicing agreements and advance repayment methodologies).
Investor Verification Checklist
- Verify the specific interest rate assigned to each class of the Series 2019-T2 Notes.
- Confirm the outstanding balance and terms of the redeemed Series 2016-T4 Notes to assess the net impact on the debt maturity profile.
- Review the collateral performance test metrics to understand the threshold for potential default or amortization acceleration.
- Assess the impact of the cross-collateralization on the four other series of outstanding notes.
- Monitor the Company's ability to meet the interest coverage test and collateral performance test requirements.