SEC Filing Summary: New Residential Investment Corp. (Form 8-K)
Business Context and Reporting Period
This Current Report on Form 8-K was filed by New Residential Investment Corp. (the "Company") on March 22, 2018. The filing discloses the entry into a material definitive agreement involving the issuance of variable funding notes by an indirect subsidiary, NRZ Advance Receivables Trust 2015-ON1 (the "Issuer").
Key Financial Metrics and Transaction Details
- Transaction Type: Issuance of servicer advance receivables and deferred servicing fee backed variable funding notes (Series 2018-VF1 Notes).
- Principal Amount: $425,000,000 (maximum principal balance).
- Interest Rate: Weighted average per annum rate equal to the greater of 2.0% or one-month LIBOR plus 1.0%.
- Term: Revolving period of 1 year.
- Use of Proceeds: Redemption of the Series 2015-VF1 Notes.
- Collateral: Secured by servicer advance receivables made by Ocwen Loan Servicing, LLC and New Residential Mortgage LLC, and accrued servicing fees.
- Holder: All notes are held by JPMorgan Chase Bank, N.A.
Material Changes and Covenants
The transaction represents a refinancing of prior debt (Series 2015-VF1 Notes). The new notes include specific covenants and events of default that could trigger interest rate increases, rapid amortization, or acceleration of principal repayment. Key events of default include:
- Failure to satisfy interest coverage or collateral performance tests.
- Failure to meet minimum tangible net worth or liquidity requirements for the Company or Ocwen.
- Failure to satisfy leverage tests (for certain notes).
- Change of control of the Company.
- Insolvency of Ocwen, the Sponsor, or relevant subsidiaries.
- Non-payment of principal or interest when due.
Guidance, Risks, and Contingencies
The filing does not provide forward-looking guidance or management commentary regarding future earnings or strategic outlook. The primary risks disclosed are contingent upon the performance of the underlying collateral and the financial health of the servicers (Ocwen and NRM). The definitive documents contain affirmative covenants regarding reporting, compliance with laws, and maintenance of servicing standards, as well as negative covenants limiting amendments to servicing agreements and advance repayment methodologies.
Investor Verification Checklist
- Verify the current status of the redeemed Series 2015-VF1 Notes.
- Monitor the Company's and Ocwen's compliance with the minimum liquidity and tangible net worth covenants.
- Review the performance of the servicer advance receivables collateral pool.
- Track the one-month LIBOR rate to determine the effective interest cost on the new notes.
- Confirm the Company's leverage ratios to ensure compliance with applicable leverage tests.