Quarterly report pursuant to Section 13 or 15(d)

DEBT OBLIGATIONS

v3.19.1
DEBT OBLIGATIONS
3 Months Ended
Mar. 31, 2019
Debt Disclosure [Abstract]  
DEBT OBLIGATIONS DEBT OBLIGATIONS
 
The following table presents certain information regarding New Residential’s debt obligations:

 
March 31, 2019
 
December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
Collateral
 
 
Debt Obligations/Collateral
 
Outstanding Face Amount
 
Carrying Value(A)
 
Final Stated Maturity(B)
 
Weighted Average Funding Cost
 
Weighted Average Life (Years)
 
Outstanding Face
 
Amortized Cost Basis
 
Carrying Value
 
Weighted Average Life (Years)
 
Carrying Value(A)
Repurchase Agreements(C)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Agency RMBS(D)
 
$
7,271,582

 
$
7,271,582

 
Apr-19
 
2.67
%
 
0.1
 
$
7,368,726

 
$
7,510,370

 
$
7,586,872

 
0.5
 
$
4,346,070

Non-Agency RMBS (E)
 
7,429,095

 
7,428,992

 
Mar-19 to Aug-19
 
3.61
%
 
0.1
 
19,832,039

 
8,309,648

 
8,870,630

 
7.0
 
7,434,785

Residential Mortgage Loans(F)
 
3,650,367

 
3,649,371

 
Apr-19 to Dec-20
 
4.32
%
 
0.7
 
4,364,713

 
4,147,040

 
4,160,896

 
13.1
 
3,678,246

Real Estate Owned(G)(H)
 
91,891

 
91,861

 
Apr-19 to Dec-20
 
4.68
%
 
0.5
 
N/A

 
N/A

 
107,693

 
N/A
 
94,868

Total Repurchase Agreements
 
18,442,935

 
18,441,806

 
 
 
3.38
%
 
0.2
 
 
 
 
 
 
 
 
 
15,553,969

Notes and Bonds Payable
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Excess MSRs(I)
 
197,759

 
197,563

 
Feb-20 to Jul-22
 
5.48
%
 
3.3
 
115,570,597

 
350,562

 
460,570

 
5.6
 
297,563

MSRs(J)
 
2,303,925

 
2,296,562

 
Mar-20 to Jul-24
 
4.33
%
 
2.8
 
386,224,299

 
3,883,857

 
4,573,349

 
6.5
 
2,360,856

Servicer Advances(K)
 
3,089,398

 
3,086,534

 
Jun-19 to Dec-21
 
3.57
%
 
1.7
 
3,527,120

 
3,712,371

 
3,734,320

 
1.6
 
3,382,455

Residential Mortgage Loans(L)
 
498,044

 
498,065

 
Apr-19 to Jul-43
 
4.33
%
 
5.5
 
585,985

 
583,180

 
551,641

 
9.0
 
122,465

Consumer Loans(M)
 
874,420

 
871,578

 
Dec-21 to Mar-24
 
3.42
%
 
2.7
 
1,005,605

 
1,010,265

 
1,005,519

 
3.5
 
936,447

Receivable from government agency(L)
 
1,800

 
1,800

 
Apr-19
 
5.11
%
 
0.1
 
N/A

 
N/A

 
1,260

 
N/A
 
2,480

Total Notes and Bonds Payable
 
6,965,346

 
6,952,102

 
 
 
3.91
%
 
2.5
 
 
 
 
 
 
 
 
 
7,102,266

Total/ Weighted Average
 
$
25,408,281

 
$
25,393,908

 
 
 
3.53
%
 
0.9
 
 
 
 
 
 
 
 
 
$
22,656,235



(A)
Net of deferred financing costs.
(B)
All debt obligations with a stated maturity through April 30, 2019 were refinanced, extended or repaid.
(C)
These repurchase agreements had approximately $78.4 million of associated accrued interest payable as of March 31, 2019.
(D)
All of the Agency RMBS repurchase agreements have a fixed rate. Collateral amounts include approximately $7.0 billion of related trade and other receivables.
(E)
$6,792.4 million face amount of the Non-Agency RMBS repurchase agreements have LIBOR-based floating interest rates while the remaining $636.7 million face amount of the Non-Agency RMBS repurchase agreements have a fixed rate. This also includes repurchase agreements of $170.9 million on retained servicer advance and consumer loan bonds.
(F)
All of these repurchase agreements have LIBOR-based floating interest rates.
(G)
All of these repurchase agreements have LIBOR-based floating interest rates.
(H)
Includes financing collateralized by receivables including claims from FHA on Ginnie Mae EBO loans for which foreclosure has been completed and for which New Residential has made or intends to make a claim on the FHA guarantee.
(I)
Includes $197.8 million of corporate loans which bear interest equal to the sum of (i) a floating rate index equal to one-month LIBOR and (ii) a margin of 3.00%. The outstanding face amount of the collateral represents the UPB of the residential mortgage loans underlying the interests in MSRs that secure these notes.
(J)
Includes: $689.0 million of MSR notes which bear interest equal to the sum of (i) a floating rate index equal to one-month LIBOR and (ii) a margin ranging from 2.25% to 2.75%; and $1,614.9 million of public notes with fixed interest rates ranging from 3.55% to 4.62%. The outstanding face amount of the collateral represents the UPB of the residential mortgage loans underlying the MSRs and mortgage servicing rights financing receivables that secure these notes.
(K)
$2.8 billion face amount of the notes have a fixed rate while the remaining notes bear interest equal to the sum of (i) a floating rate index equal to one-month LIBOR or a cost of funds rate, as applicable, and (ii) a margin ranging from 1.15% to 2.15%. Collateral includes Servicer Advance Investments, as well as servicer advances receivable related to the mortgage servicing rights and mortgage servicing rights financing receivables owned by NRM.
(L)
Represents: (i) a $6.4 million note payable to Nationstar that bears interest equal to one-month LIBOR plus 2.88%, (ii) $116.1 million fair value of SAFT 2013-1 mortgage-backed securities issued with fixed interest rates ranging from 3.50% to 3.76% (see Note 12 for details), and (iii) $377.4 million of asset-backed notes held by third parties which bear interest equal to 4.59%.
(M)
Includes the SpringCastle debt, which is comprised of the following classes of asset-backed notes held by third parties: $633.4 million UPB of Class A notes with a coupon of 3.05% and a stated maturity date in November 2023; $210.8 million UPB of Class B notes with a coupon of 4.10% and a stated maturity date in March 2024; $18.3 million UPB of Class C-1 notes with a coupon of 5.63% and a stated maturity date in March 2024; $18.3 million UPB of Class C-2 notes with a coupon of 5.63% and a stated maturity date in March 2024. Also includes a $13.4 million face amount note which bears interest equal to 4.00%.

As of March 31, 2019, New Residential had no outstanding repurchase agreements where the amount at risk with any individual counterparty or group of related counterparties exceeded 10% of New Residential’s stockholders' equity. The amount at risk under repurchase agreements is defined as the excess of carrying amount (or market value, if higher than the carrying amount) of the securities or other assets sold under agreement to repurchase, including accrued interest plus any cash or other assets on deposit to secure the repurchase obligation, over the amount of the repurchase liability (adjusted for accrued interest).

General

Certain of the debt obligations included above are obligations of New Residential’s consolidated subsidiaries, which own the related collateral. In some cases, such collateral is not available to other creditors of New Residential.

New Residential has margin exposure on $18.4 billion of repurchase agreements as of March 31, 2019. To the extent that the value of the collateral underlying these repurchase agreements declines, New Residential may be required to post margin, which could significantly impact its liquidity.
 
Activities related to the carrying value of New Residential’s debt obligations were as follows:
 
Excess MSRs
 
MSRs
 
Servicer Advances(A)
 
Real Estate Securities
 
Residential Mortgage Loans and REO
 
Consumer Loans
 
Total
Balance at December 31, 2018
$
297,563

 
$
2,360,856

 
$
3,382,455

 
$
11,780,855

 
$
3,898,059

 
$
936,447

 
$
22,656,235

Repurchase Agreements:
 
 
 
 
 
 
 
 
 
 
 
 
 
Borrowings(B)

 

 

 
39,617,556

 
4,073,985

 

 
43,691,541

Repayments

 

 

 
(36,697,899
)
 
(4,105,864
)
 

 
(40,803,763
)
Capitalized deferred financing costs, net of amortization

 

 

 
62

 
(1
)
 

 
61

Notes and Bonds Payable:
 
 
 
 
 
 
 
 
 
 
 
 

Borrowings(B)

 
490,000

 
1,189,660

 

 
377,382

 

 
2,057,042

Repayments
(100,000
)
 
(554,960
)
 
(1,486,496
)
 

 
(3,601
)
 
(65,314
)
 
(2,210,371
)
Discount on borrowings, net of amortization

 

 
10

 

 

 
445

 
455

Unrealized gain on notes, fair value

 

 

 

 
1,137

 

 
1,137

Capitalized deferred financing costs, net of amortization

 
666

 
905

 

 

 

 
1,571

Balance at March 31, 2019
$
197,563

 
$
2,296,562

 
$
3,086,534

 
$
14,700,574

 
$
4,241,097

 
$
871,578

 
$
25,393,908


(A)
New Residential net settles daily borrowings and repayments of the Notes and Bonds Payable on its servicer advances.

Maturities
 
New Residential’s debt obligations as of March 31, 2019 had contractual maturities as follows:
Year
 
Nonrecourse
 
Recourse
 
Total
April 1 through December 31, 2019
 
$
364,302

 
$
17,087,034

 
$
17,451,336

2020
 
933,023

 
2,049,438

 
2,982,461

2021
 
1,807,350

 
690,880

 
2,498,230

2022
 
377,382

 
197,759

 
575,141

2023
 
729,732

 
455,883

 
1,185,615

2024 and thereafter
 
247,371

 
468,127

 
715,498

 
 
$
4,459,160

 
$
20,949,121

 
$
25,408,281



Borrowing Capacity

The following table represents New Residential’s borrowing capacity as of March 31, 2019:
Debt Obligations / Collateral
 
Borrowing Capacity
 
Balance Outstanding
 
Available Financing
Repurchase Agreements
 
 
 
 
 
 
Residential mortgage loans and REO
 
$
5,771,297

 
$
3,742,258

 
$
2,029,039

Non-Agency RMBS
 
650,000

 
636,651

 
13,349

 
 
 
 
 
 
 
Notes and Bonds Payable
 
 
 
 
 
 
Excess MSRs
 
150,000

 

 
150,000

MSRs
 
1,260,000

 
689,040

 
570,960

Servicer advances(A)
 
1,682,869

 
1,075,741

 
607,128

Consumer loans
 
150,000

 
13,373

 
136,627

 
 
$
9,664,166

 
$
6,157,063

 
$
3,507,103



(A)
New Residential’s unused borrowing capacity is available if New Residential has additional eligible collateral to pledge and meets other borrowing conditions as set forth in the applicable agreements, including any applicable advance rate. New Residential pays a 0.2% fee on the unused borrowing capacity. Excludes borrowing capacity and outstanding debt for retained Non-Agency bonds collateralized by servicer advances with a current face amount of $86.3 million.

Certain of the debt obligations are subject to customary loan covenants and event of default provisions, including event of default provisions triggered by certain specified declines in New Residential’s equity or a failure to maintain a specified tangible net worth, liquidity, or indebtedness to tangible net worth ratio. New Residential was in compliance with all of its debt covenants as of March 31, 2019.