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Rithm Capital Corp., the parent company of mortgage lender Newrez LLC, will sell up to 34.5 million shares to raise money for corporate purposes that may include future acquisitions, investments or debt repayment.
The public offering of 30 million shares announced Tuesday was previously authorized under a shelf registration statement filed with the Securities and Exchange Commission, the company said.
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Rithm expects to grant the underwriters of the deal an option to purchase up to 4.5 million additional shares. If the option is fully exercised, Rithm will have 524.2 million shares of common stock outstanding, an increase of 7 percent, the company said in a deal prospectus.
Shares in Rithm, which touched a new 52-week high of $12.02 on Sept. 19, fell 3 percent in after hours trading from Tuesday’s closing price of $11.81.
Shares in publicly traded mortgage lenders have generally been on the upswing in recent months as mortgage rates retreat from 2024 highs. The Federal Reserve’s Sept. 18 rate cut provided an additional boost.
Rithm has been on an acquisition tear in recent years, with the goal of expanding its mortgage origination, servicing and asset management capabilities.
In 2021, back when the company was still known as New Residential Investment Corp., it acquired Caliber Home Loans and Genesis Capital LLC, which provides loans to developers and real estate investors.
Most of Caliber’s loan originators were laid off after the $1.675 billion deal closed, and the integration of Caliber’s operations into Newrez was completed in the fourth quarter of 2023.
Newrez itself has been hit with layoffs this year, following Rithm’s $720 million acquisition of Specialized Loan Servicing LLC and its parent company, Computershare Mortgage Services Inc.
Based in Fort Washington, Pennsylvania, Newrez sponsors 682 mortgage loan originators working out of 76 branch locations, down from 983 loan originators at 155 locations in October, according to Nationwide Multistate Licensing System records.
Newrez is also partnered with real estate brokerages in a number of mortgage joint ventures through its Newrez Ventures platform, formerly known as Shelter Mortgage Company.
In November, Rithm closed a $720 million acquisition of Sculptor Capital Management Inc., a hedge fund with $32 billion in assets under management that invests in debt, real estate and “multi-strategy platforms.”
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