Nationstar Mortgage Holdings Inc. has priced $300 million in asset-backed term notes, “the first-ever agency servicer advance securitization,” the Lewisville, Texas-based residential mortgage servicer said.

The sale of the notes issued by the Nationstar Agency Advance Funding Trust is expected to close on Jan. 31.

Nationstar’s CEO Jay Bray described the securitization as a way to further diversify the firm’s funding sources, reduce advance funding costs and establish “a Nationstar precedent for financing” its advances with fixed-rate-term debt at a very opportune time in the rate cycle.

The securitization helped reduce the Libor-based rate of the notes from 1.65% (as of January 24, 2013) to a weighted average fixed interest rate of 1.46% and a weighted average term of three years.

These notes will replace $300 million in existing agency servicing advance facilities that carried a weighted average floating rate of Libor plus 2.86%, or 3.1% in total, Nationstar said.

The effective advance rate of the new facility also changed. It will be approximately 94%, which is higher than the effective advance rate on the facilities being replaced.

Nationstar said it is developing a programmatic term asset-backed security issuance program that will enable the servicer to efficiently finance current and future acquisitions of agency and nonagency servicing advance assets.

“We intend to access the ABS markets frequently,” Bray said, and along the way, “drive further gains in servicing profitability.”

As of Sept. 30, 2012, Nationstar serviced over one million residential mortgages with a servicing portfolio totaling $198 billion in unpaid principal balance.

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