New Residential Investment Corp. Signs Asset Purchase Agreement with Ditech Holding Corporation

  • New Residential enters into “stalking horse” Asset Purchase Agreement
    with Ditech to purchase certain assets in Ditech’s Chapter 11
    Bankruptcy
  • Acquisition of these assets, in addition to those already operated
    through NewRez and Shellpoint Mortgage Servicing, would further New
    Residential’s position as an industry leading originator and servicer

NEW YORK–(BUSINESS WIRE)–New Residential Investment Corp. (NYSE: NRZ, “New Residential”, the
“Company”) announced today that it has entered into a “stalking horse”
Asset Purchase Agreement (the “APA”) with Ditech Holding Corporation
(“Ditech”) and Ditech Financial LLC (“Ditech Financial”) to purchase
substantially all of the forward assets of Ditech Financial. The final
purchase price will be determined at the closing of the transaction
based on the tangible book value of the related assets, subject to
certain agreed upon adjustments. New Residential expects to finance the
acquisition of these assets with existing financing facilities and cash
on hand.

Under the terms of the APA, subject to certain conditions, New
Residential has agreed to purchase, among other assets, Ditech
Financial’s forward Fannie Mae, Ginnie Mae and non-agency mortgage
servicing rights (“MSRs”), with an aggregate unpaid principal balance of
approximately $63 billion as of March 31, 2019, the servicer advance
receivables relating to such MSRs and other net assets core to the
forward origination and servicing businesses. Additionally, New
Residential has agreed to assume certain Ditech office spaces and plans
to make employment offers to a number of Ditech employees. Under the
APA, New Residential will not purchase any of the stock or assets
related to Ditech Financial’s reverse mortgage business.

We are confident that the acquisition of these select assets,
operations and employees from Ditech will be complementary to our
existing portfolio and business as well as beneficial to our
shareholders and the long-term strategy of our Company,” said Michael
Nierenberg, Chairman, Chief Executive Officer and President of New
Residential. “The acquisition of these origination and servicing
operations from Ditech, in addition to those already operated through
NewRez and Shellpoint Mortgage Servicing, will further our position as
an industry leading originator and servicer.”

This stalking horse agreement represents a positive step forward in
Ditech’s court-supervised process,” said Thomas F. Marano, Chairman of
the Board and Chief Executive Officer of Ditech. “New Residential has a
high-quality platform as well as the necessary expertise, operations and
scale to efficiently manage these assets for the benefit of both New
Residential and Ditech stakeholders.”

If New Residential’s bid is successful, the transaction is expected to
close in the second half of 2019, subject to certain closing conditions
including, among other things, (a) New Residential being identified in
Ditech’s bankruptcy proceeding as the winning bidder of the assets
referenced in the APA, (b) the entry of a confirmation order by the
United States Bankruptcy Court for the Southern District of New York
that is acceptable to New Residential, (c) receipt of approvals from
certain governmental and quasi-governmental agencies, and (d) other
customary closing conditions. The sale of certain assets are also
subject to receipt of third party consents. In the event the APA is
terminated for certain reasons, including if Ditech accepts a higher or
better offer from a competing bidder at the auction, subject to the
approval of the Bankruptcy Court, Ditech may be required to reimburse
the Company for its reasonable expenses up to $6 million and pay the
Company a termination fee of up to $30 million.

Sidley Austin LLP is acting as legal counsel and Moelis & Company LLC is
acting as financial advisor to New Residential in connection with the
agreement.

ABOUT NEW RESIDENTIAL

New Residential focuses on opportunistically investing in, and actively
managing, investments principally related to residential real estate.
New Residential primarily targets investments in mortgage servicing
related assets and other related opportunistic investments. Following
the acquisition of Shellpoint Partners LLC (“Shellpoint”) in 2018, New
Residential now also benefits from Shellpoint’s origination and
third-party servicing platform, as well as a suite of ancillary
businesses including title insurance, appraisal management, real estate
owned management and other real estate services. New Residential is
organized and conducts its operations to qualify as a real estate
investment trust (“REIT”) for federal income tax purposes. New
Residential is managed by an affiliate of Fortress Investment Group LLC,
a global investment management firm.

ABOUT DITECH

Ditech is an independent servicer and originator of mortgage loans and
servicer of reverse mortgage loans. Based in Fort Washington,
Pennsylvania, Ditech services a diverse loan portfolio. For more
information about Ditech, please visit Ditech website at
www.ditechholding.com. The information on Ditech website is not a part
of this release.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain information in this press release constitutes as
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995, including, but not limited to
the risks relating to the Transaction, including in respect of the
satisfaction of closing conditions and the timing thereof; unanticipated
difficulties financing the Transaction; unexpected challenges related to
the integration of the Sellers’ businesses and operations; changes in
general economic and/or industry specific conditions; difficulties in
obtaining governmental and other third party consents in connection with
the Transaction; unanticipated expenditures relating to or liabilities
arising from the Transaction or the acquired businesses; the Sellers’
ability to service MSRs pursuant to agreements entered into in
connection with the Transaction; uncertainties as to the timing of the
Transaction; litigation or regulatory issues relating to the
Transaction, the Sellers, the Company or the acquired businesses; the
impact of the Transaction on relationships with, and potential
difficulties retaining, employees, customers and other third parties;
and the inability to obtain, or delays in obtaining, expected benefits
from the Transaction. These statements are not historical facts. They
represent management’s current expectations regarding future events and
are subject to a number of trends and uncertainties, many of which are
beyond our control, which could cause actual results to differ
materially from those described in the forward-looking statements.
Accordingly, you should not place undue reliance on any forward-looking
statements contained herein. For a discussion of some of the risks and
important factors that could affect such forward-looking statements, see
the sections entitled “Cautionary Statements Regarding Forward Looking
Statements,” “Risk Factors” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” in New Residential’s
annual and quarterly reports and other filings filed with the U.S.
Securities and Exchange Commission, which are available on New
Residential’s website (www.newresi.com).
New risks and uncertainties emerge from time to time, and it is not
possible for New Residential to predict or assess the impact of every
factor that may cause its actual results to differ from those contained
in any forward-looking statements. Forward-looking statements contained
herein speak only as of the date of this press release, and New
Residential expressly disclaims any obligation to release publicly any
updates or revisions to any forward-looking statements contained herein
to reflect any change in New Residential’s expectations with regard
thereto or change in events, conditions or circumstances on which any
statement is based.

Contacts

New Residential Investor Relations
Kaitlyn
Mauritz
212-479-3150
[email protected]

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