Nationstar Mortgage Holdings Inc. (NYSE: NSM) (the “Company”), a leading residential mortgage servicer, today announced the pricing of $300 million in asset-backed term notes (the “Notes”) to be issued by Nationstar Agency Advance Funding Trust (the “Issuer”). The issuance and sale of the Notes is subject to customary closing conditions and is expected to close on January 31, 2013.
The Notes carry a weighted average fixed interest rate of 1.46% and a weighted average term of 3.0 years. The Notes will replace $300 million in existing Agency servicing advance facilities that carried a weighted average floating rate of Libor plus 2.86%, or 3.10% in total, resulting in a reduction in rate of 1.65% as of January 24, 2013. Additionally, the effective advance rate of the new facility will be approximately 94%, an increase over the effective advance rate on the facilities being replaced. Nationstar is developing a programmatic Term Asset-Backed Security (“ABS”) issuance program which will allow it to efficiently finance current and future acquisitions of Agency and non-Agency servicing advance assets.
“I am pleased to announce the execution of the first ever Agency servicer advance securitization,” said Jay Bray, Nationstar’s CEO. “This securitization further diversifies our funding sources, reduces our advance funding costs, and establishes a Nationstar precedent for financing our advances with fixed-rate term debt at a very opportune time in the rate cycle. We intend to access the ABS markets frequently as we execute on our stated goal to lower advance expenses to drive further gains in servicing profitability.”
Barclays Capital Inc. acted as the lead manager for the offering. Wells Fargo Securities, LLC, Credit Suisse Securities (USA), LLC, and RBS Securities, Inc. acted as co-managers for the offering.
The Notes and related guarantees have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws. Accordingly, the Notes are being offered and sold only to “qualified institutional buyers” (as defined in Rule 144A under the Securities Act) and outside the United States to non-U.S. persons in offshore transactions in accordance with Regulation S under the Securities Act. Therefore, the Notes will be subject to restrictions on transferability and resale, and may not be transferred or resold absent an effective registration statement or an applicable exemption from such registration requirements of the Securities Act.