DALLAS - Nationstar Mortgage Holdings Inc., a subsidiary of Mr. Cooper Group Inc. (NASDAQ: COOP), has priced a $750 million offering of senior notes with a 6.5% annual interest rate, maturing on August 1, 2029. The offering, which is expected to close around August 1, 2024, is aimed at repaying a portion of Mr. Cooper's outstanding MSR facilities.
The semi-annual interest payments on the notes are scheduled to begin on February 1, 2025. The notes will be jointly and severally guaranteed by Mr. Cooper and wholly-owned domestic subsidiaries of Nationstar, with certain subsidiaries excluded.
This private offering targets qualified institutional buyers in the United States and international investors in compliance with Regulation S under the Securities Act of 1933, as amended. The notes have not been registered under the Securities Act or any state securities laws and may not be offered or sold in the U.S. without registration or an exemption from such requirements.
The press release from Mr. Cooper Group clarifies that this announcement is not an offer to sell or a solicitation of an offer to buy the notes. It also states that the sale of the notes would be unlawful in any jurisdiction without registration or qualification under the securities laws of that jurisdiction.
Furthermore, the press release contains forward-looking statements that involve risks and uncertainties. The actual results could differ materially from those projected in the forward-looking statements. Factors that could cause such differences are detailed in Mr. Cooper's filings with the Securities and Exchange Commission.
Mr. Cooper Group, known for its customer-centric servicing and transaction-based services related to single-family residences, operates under its primary brands: Mr. Cooper® and Xome®. The company is recognized as the largest home loan servicer in the United States, focused on delivering a variety of servicing and lending products, services, and technologies.
This report is based on a press release statement from Mr. Cooper Group Inc.
In other recent news, Mr. Cooper Group Inc. has reported a significant increase in pre-tax operating income, which rose 46% year-over-year to $219 million. The company's operating return on tangible common equity (ROTCE) also exceeded its 2025 target, reaching 15.3%.
In a strategic move, Mr. Cooper Group announced the acquisition of Flagstar's mortgage operations for $1.4 billion, a development expected to add 1 to 1.5 points to the company's return on equity.
In addition, the company plans to continue its stock repurchase program, buying back approximately $50 million of stock per quarter. Analysts from Piper Sandler have increased the price target on Mr. Cooper Group's stock to $106, maintaining an Overweight rating. This adjustment follows the company's plans to acquire the residential Mortgage Servicing Rights (MSR) business and third-party origination platform from Flagstar.
These recent developments underscore Mr. Cooper Group's strategic efforts to bolster its portfolio and enhance shareholder value. The company is also preparing to expand its originations and expects an increase in constant prepayment rates (CPRs) by 2025. The acquisition and the company's strategic initiatives are expected to drive higher origination volumes and profitability for the company.
InvestingPro Insights
As Mr. Cooper Group Inc. (NASDAQ: COOP) continues to make strategic financial moves, such as the recent $750 million senior notes offering, investors are keeping a keen eye on the company's performance metrics.
According to InvestingPro data, Mr. Cooper Group has a notable market capitalization of $5.91 billion and an attractive P/E ratio of 8.03, reflecting its earnings over the last twelve months as of Q2 2024. The company's revenue growth is particularly impressive, with a 30.45% increase over the same period.
Investors may also be buoyed by the company's strong price performance, with significant returns over various timeframes. An InvestingPro Tip highlights that the company has seen a substantial return of 59.13% over the last year, indicating a robust upward trajectory for its stock price. Another tip points out that analysts are optimistic about the company's profitability, predicting it will be profitable this year, which is corroborated by its profitable performance in the last twelve months.
For those considering an investment in Mr. Cooper Group, there are additional InvestingPro Tips available, which can provide deeper insights into the company's financial health and future prospects. Currently, there are 11 more tips listed on InvestingPro for Mr. Cooper Group, accessible at: https://www.investing.com/pro/COOP. Interested readers can use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, unlocking a wealth of investment intelligence.
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