On September 18, 2013, the Board of Directors declared a quarterly dividend of $0.175 per common share, or $44 million, for the third quarter.
INVESTMENT HIGHLIGHTS FOR THE QUARTER ENDED SEPTEMBER 30, 2013
- Excess MSR Investment – Invested $216 million, including:
- $198 million was invested to fund additional closings and increase ownership in previously settled pools, and
- $18 million was invested to acquire a 40% interest in Excess MSRs related to $5 billion UPB of non-Agency loans.
- Consumer Loan B-Note Sale – The B-Notes represent subordinate financing of the consumer loan pool, in which New Residential held an interest. New Residential generated $107 million of proceeds from the sale of a 30% interest in $372 million of B-Notes at 96% of par, or a 6% yield. The sale reduces New Residential’s cash basis in the consumer loan portfolio to $132 million, from $241 million.
- Non-Agency RMBS
- Sold $148 million face amount of non-Agency RMBS at an average price of 80% of par, versus our amortized cost basis of 73% of par – generated an $11 million gain on sale and raised $36 million of net proceeds.
- Invested $28 million, net of financing, to purchase $108 million face amount of non-Agency RMBS at an average price of 77% of par. We currently expect that the investment will generate a levered return of 12% to 14%.
INVESTMENT HIGHLIGHTS SUBSEQUENT TO SEPTEMBER 30, 2013
- Excess MSR Investment – Invested or committed to invest $59 million.
- In November, committed $55 million to acquire a 33% interest in five Excess MSR pools related to approximately $24 billion UPB.
- In November, invested $3 million to fund additional closings as part of a non-Agency Excess MSR commitment made in January 2013; New Residential expects to invest an additional $1 million to complete the funding of this commitment.
- Non-Agency RMBS
- Financing – In October, paid down $340 million of repurchase agreement and entered into a $414 million one-year repurchase agreement related to $724 million face amount of RMBS. This financing decreases the cost of funds from LIBOR+225 basis points to LIBOR+175 basis points.
- Invested $57 million, net of financing, to buy $194 million face amount of RMBS at an average price of 65%. We currently expect that the investment will generate a levered return of 12% to 14%.
- Sold $53 million face amount of RMBS at an average price of 73% of par, versus our amortized cost basis of 60% of par – generated a $7 million gain on sale and raised $7 million of proceeds, net of financing.
- Non-Performing Loan Investment – In November, committed to invest approximately $100 million to purchase a pool of non-performing loans with an aggregate face amount of about $200 million. We expect to finance a portion of the purchase price.
The Company believes there is a robust investment pipeline of assets with attractive yields.