New Residential Investment Corp. (NRZ) stock plunged by 4.94% at the last trading close as well as the NRZ stock price continued to decline by 1.25% in the pre-market trading session. New Residential is a major capital and infrastructure provider to the mortgage and financial services industries. NRZ’s goal is to achieve competitive risk-adjusted returns through a portfolio of investments and operating companies in all interest rate environments
On April 14, 2021, the news came out that Caliber Home Loans has been acquired by New Residential Investment through a binding deal with an agent of Lone Star Funds. New Residential plans to combine the networks of Caliber and NewRez LLC, New Residential’s wholly-owned mortgage originator and servicer, with this purchase. The deal is expected to close as soon as possible in the third quarter of 2021, subject to multiple approvals and usual closing conditions.
It is anticipated that the deal will:
- Expand and boost earnings profile in a variety of rate environments.
- With an industry-leading recapture program, it will expand the consumer satisfaction activities.
- Extensive distributed retail infrastructure improves purchasing origination capability.
- Expand New Residential’s asset base with an appealing MSR portfolio.
- Expand the capacities and possibilities for asset generation at New Residential.
- Promote growth by providing expertise, size, and ability.
In addition to this,
On the same day, New Residential Investment announced that NRZ has set a public offering price of $10.10 per share for its underwritten public offering of 45,000,000 shares of common stock. Depending on the customary closing terms, the offering is scheduled to close on April 19, 2021. NRZ has also given the underwriters a 30-day option to buy up to an additional 6,750,000 shares of common stock in conjunction with the offering.
NRZ plans to use the gross profits from this sale to fund and pay associated fees and costs for its previously planned purchase of Caliber Home Loans, with any remaining proceeds going to acquisitions and general corporate purposes. NRZ plans to use the net proceeds from this offering for general corporate purposes if the Caliber deal does not go through.