Mr. Cooper Group Inc. Announces Pricing of Offering of $1 Billion of Senior Notes
Mr. Cooper Group Inc. (NASDAQ: COOP) has announced the pricing of a $1,000,000,000 7.125% Senior Notes due 2032 offering by Nationstar Mortgage Holdings Inc., a direct wholly-owned subsidiary of Mr. Cooper. The Notes will bear interest at 7.125% per annum, maturing on February 1, 2032, with semi-annual interest payments beginning on August 1, 2024. The net proceeds will be used to repay a portion of the amounts outstanding under Mr. Cooper’s MSR facilities. The offering was made to 'qualified institutional buyers' and outside the United States pursuant to Regulation S under the Securities Act. The Notes have not been registered under the Securities Act or the securities laws of any other jurisdiction.
The announcement by Mr. Cooper Group Inc. regarding the pricing of a $1 billion senior notes offering is a substantial financial event with potential implications for investors and the company's capital structure. The interest rate of 7.125% is notably higher than the average corporate bond yield, reflecting either a premium for risk associated with Mr. Cooper or prevailing market conditions demanding higher yields. Investors should consider the company's creditworthiness and the broader economic environment, including interest rate trends and the demand for higher-yield debt instruments.
Furthermore, the use of proceeds to repay portions of outstanding MSR (Mortgage Servicing Rights) facilities indicates a strategic move to manage or restructure debt. This could signal Mr. Cooper's intent to improve its balance sheet efficiency or respond to changes in the mortgage servicing market. Stakeholders should assess how this debt issuance aligns with Mr. Cooper's overall financial strategy and the potential effects on its liquidity and interest expense.
From a legal perspective, the reliance on an exemption from the registration requirements of the Securities Act of 1933 is noteworthy. The decision to offer the notes only to 'qualified institutional buyers' or outside the United States under Regulation S suggests a targeted approach to fundraising, possibly to expedite the process or to cater to a specific investor base. This strategic choice limits the pool of potential investors but also reduces the regulatory burden and costs associated with a public offering.
It is critical for investors to understand that these notes have not been registered under the Securities Act, which means there are restrictions on their transferability and they may not have the same level of investor protections as registered securities. This could impact the liquidity and marketability of the notes and potential buyers must be aware of these limitations.
Examining the broader market context, the issuance of high-yield debt like the 7.125% Senior Notes by Mr. Cooper can be indicative of investor appetite for riskier assets. In a low-interest-rate environment, such offerings may attract yield-seeking investors. However, the higher interest rate also suggests that Mr. Cooper may be perceived as a higher risk compared to other investment-grade issuers. Market participants should evaluate how this debt issuance is received by the market, as it could influence perceptions of the mortgage servicing industry's stability and the company's market position.
Additionally, the guarantee by Mr. Cooper and its subsidiaries provides a layer of security for investors, potentially making the notes more attractive despite the lack of registration. Analyzing the performance of Mr. Cooper's stock and the trading behavior of similar securities following the issuance could offer insights into the market's confidence in the sector and Mr. Cooper's financial health.
01/29/2024 - 06:02 PM
DALLAS --(BUSINESS WIRE)--
Mr. Cooper Group Inc. (NASDAQ: COOP) (“Mr. Cooper”) announced the pricing of an offering by Nationstar Mortgage Holdings Inc., a direct wholly-owned subsidiary of Mr. Cooper (“Nationstar”), of $1,000,000,000 7.125% Senior Notes due 2032 (the “Notes”). The Notes will bear interest at 7.125% per annum and will mature on February 1, 2032. Interest on the Notes will be payable semi-annually on February 1 and August 1 of each year, beginning on August 1, 2024.
The offering is expected to close on or around February 1, 2024, subject to customary closing conditions. It is expected that the net proceeds of the offering will be used to repay a portion of the amounts outstanding under Mr. Cooper’s MSR facilities.
The Notes will be guaranteed on a joint and several basis by Mr. Cooper and wholly-owned domestic subsidiaries of Nationstar (other than certain excluded subsidiaries).
The offering of the Notes was made in reliance upon an exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), in the United States only to investors who are “qualified institutional buyers,” as that term is defined in Rule 144A under the Securities Act, or outside the United States pursuant to Regulation S under the Securities Act. The Notes have not been registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States without registration or an applicable exemption from registration requirements.
This press release does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of any of the Notes in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Forward-Looking Statements
This press release may include information that could constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements may involve risk and uncertainties that could cause actual results to differ materially from any future results encompassed within the forward-looking statements. Factors that could cause or contribute to such differences include those matters disclosed in Mr. Cooper’s Securities and Exchange Commission filings. Past results of Mr. Cooper are not necessarily indicative of future results. Mr. Cooper does not undertake any obligation to update any forward-looking statement.
About Mr. Cooper Group
Mr. Cooper Group Inc. (NASDAQ: COOP) provides quality servicing, origination and transaction-based services related principally to single-family residences throughout the United States with operations under its primary brands: Mr. Cooper® and Xome®. Mr. Cooper is one of the largest home loan servicers in the country focused on delivering a variety of servicing and lending products, services and technologies. Xome provides technology and data enhanced solutions to homebuyers, home sellers, real estate agents and mortgage companies.
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Investor Contact:
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Media Contact:
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Source: Mr. Cooper Group Inc.
What is the recent announcement made by Mr. Cooper Group Inc. (COOP)?
Mr. Cooper Group Inc. (COOP) announced the pricing of a $1,000,000,000 7.125% Senior Notes due 2032 offering by Nationstar Mortgage Holdings Inc., a direct wholly-owned subsidiary of Mr. Cooper.
What is the interest rate of the Senior Notes due 2032 offered by Nationstar Mortgage Holdings Inc.?
The Notes will bear interest at 7.125% per annum.
When will the Senior Notes due 2032 mature?
The Senior Notes due 2032 will mature on February 1, 2032.
What is the purpose of the net proceeds from the offering?
The net proceeds will be used to repay a portion of the amounts outstanding under Mr. Cooper’s MSR facilities.
Who are the intended investors for the offering of the Notes?
The offering was made to 'qualified institutional buyers' and outside the United States pursuant to Regulation S under the Securities Act.
Have the Notes been registered under the Securities Act or the securities laws of any other jurisdiction?
The Notes have not been registered under the Securities Act or the securities laws of any other jurisdiction.
