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Home Loan Servicing Solutions, Ltd. Reports EPS Of $0.44 And Net Income Of $14.3 Million In The Fourth Quarter Of 2012 And Declares Dividend Of $0.13 Per Ordinary Share For February And March 2013

Stocks in this article: HLSS

GEORGE TOWN, Grand Cayman, Feb. 7, 2013 (GLOBE NEWSWIRE) -- Home Loan Servicing Solutions, Ltd. ("HLSS" or the "Company") (Nasdaq:HLSS) today reported net income of $14.3 million, or $0.44 per ordinary share, for the fourth quarter of 2012.

Fourth quarter business performance highlights:

  • Earned $14.3 million, or $0.44 per ordinary share.
  • Declared October dividend of $0.11 per ordinary share and November and December dividends of $0.12 per ordinary share totaling $13.7 million for the quarter.
  • Completed in October the issuance of $250 million one-year and $450 million three-year term notes secured by servicing advance receivables at a weighted average interest spread over LIBOR of 1.55%. The proceeds were used to repay $600 million in term notes and to reduce borrowing on variable funding notes with a weighted average interest spread of 2.93%.
  • Received gross proceeds of $480.7 million from the December 24 follow-on offering of 25,300,000 ordinary shares at $19.00 per share. Proceeds from the offering and two new variable funding notes with a total commitment of $1.6 billion were used to acquire non-agency mortgage servicing assets from Ocwen representing mortgages with an unpaid principle balance of $34.6 billion.
  • Earnings include a $0.03 per share benefit from lower than expected amortization resulting from the 13.3% annualized prepayment rate for the fourth quarter versus the benchmark rate of 15%. There was no change in servicing asset valuations during the fourth quarter.

Subsequent to the end of the fourth quarter of 2012:

  • On January 15, the Company's Board of Directors declared a monthly dividend of $0.12 per ordinary share for the month of January 2013.
  • On January 22, the underwriters exercised a portion of their over-allotment option from the December 24 offering of ordinary shares in the amount of 970,578 shares for which the Company received net proceeds of $17.6 million.
  • On January 22, completed the issuance of $650 million one-year, $350 million three-year and $150 million five-year term notes secured by servicing advance receivables at a weighted average interest spread over LIBOR of 0.94%. Total proceeds of $1.15 billion were used to reduce borrowings on variable funding notes with a weighted average interest rate of one-month LIBOR plus 2.32%. The aggregate commitments on our variable funding notes were reduced from $2 billion to $1 billion.
  • On February 7, the Company's Board of Directors declared a monthly dividend of $0.13 per ordinary share for February and March 2013.

"Reflecting on our first year of operations, I believe that we have delivered on our plan to provide our shareholders with earnings and dividends that are particularly attractive given the stability and low risk of our assets which the ABS markets are starting to reward," said Chairman William Erbey. "I am pleased with the continued support of our equity and debt investors and look forward to further growth in 2013."

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