Nationstar to Sell New Notes, Eyes MSR Purchases

Nationstar Mortgage LLC and Nationstar Capital Corp. are planning to sell $250 million in senior notes to generate capital, part of which will be used for future acquisitions and transfers of servicing portfolios.

The unsecured notes were underwritten as a public offering due in 2018.

After the completion of the offering, Nationstar said, it intends to use the proceeds for various purposes including the acquisition of “certain residential mortgage servicing assets” from Bank of America NA and related businesses from their third parties.

Nationstar Mortgage Holdings, one of the largest mortgage servicers in the country that operates an integrated loan origination business, appears to be actively raising capital earmarked for further servicing asset growth while shouldering other losses.

The move follows a similar transaction that was finalized in June. It consisted of $375 million aggregate principal amount of 9.625% senior notes due 2019, $400 million aggregate principal amount of 7.875% senior notes due 2020 and $600 million of 6.500% senior notes due 2021.

Also in June Nationstar announced the pricing of $1 billion in fixed-rate asset-backed term notes issued by Nationstar Mortgage Advance Receivables Trust and the issuance of approximately $1 billion of variable funding notes would replace $1.9 billion in existing nonagency servicing advance facilities.

That securitization, in addition to the agency securitization in January 2013, executives said, was part of Nationstar’s programmatic Term Asset-Backed Security issuance program designed “to efficiently finance current and future acquisitions of agency and nonagency servicing advance assets.”

According to CEO Jay Bray, the nonagency servicer advance securitization was part of Nationstar’s stated goals to lower advance funding costs and increase the profitability of its servicing segment. “We intend to access the ABS markets several times in the upcoming quarters as we board acquired portfolios,” he stated in a company release.