Nationstar Mortgage LLC has struck a final deal to buy USD215bn (EUR164.9bn) of residential mortgage servicing rights (MSRs) and certain other assets from Bank of America Corp (NYSE:BAC), the buyer’s parent, US residential mortgage servicer Nationstar Mortgage Holdings Inc (NYSE:NSM), said on Monday.
The price tag of the MSR assets is some USD1.3bn (EUR997m), Nationstar said. The company added that it would bankroll some USD680m of the rights purchase with proceeds from a co-investment by Newcastle Investment Corp (NYSE:NCT) and Fortress-managed funds and finance the remaining USD665m portion of the price with investable cash.
Along with the rights, Nationstar will also acquire some USD5.8bn in related servicing advance receivables. It expects to fund that portion through third-party financing accords.
The rights purchase will be finalised upon the receipt of investor and other third-party approvals, the majority of which the buyer expects to occur during the first quarter of this year.
Through the deal, Nationstar will expand its client base by over 1.3m from 1.2m currently. The move is in line with the buyer’s strategy to drive profitability over the entire economic cycle, via servicing, solutions, and origination operations, Nationstar added.