Nationstar Mortgage Holdings has priced $1 billion in fixed-rate asset-backed term notes whose proceeds will be used to finance certain servicing assets.
The securitization will replace $1.9 billion in existing nonagency servicing advances that are expected to reduce the rate by over 1.75%.
The note sale is expected to close on June 7.
Nationstar Mortgage Advance Receivables Trust will issue the term notes at a weighted average fixed interest rate of 2.1% and a weighted average term of three years.
The effective advance rate of the notes will be approximately 93%, which is higher than the effective advance rate on the previous notes.
According to the bank, this securitization, along with the agency securitization in January 2013, is part of Nationstar’s Term Asset-Backed Security issuance designed to finance “current and future acquisitions of agency and nonagency servicing advance assets.”
The nonagency servicer advance securitization is in line with the bank’s goal of lower advance funding costs and increased mortgage servicing profitability,
“This execution also diversifies our funding sources and exchanges floating-rate debt with fixed-rate term debt locked in at extremely favorable rates.”
“We intend to access the ABS markets several times in the upcoming quarters as we board acquired portfolios,” Bray said.
