Item 1.01
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Entry into a Material Definitive Agreement.
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Issuance of Notes
On August 15, 2019, New Residential Investment Corp. (the “Company”), NRZ Advance Receivables Trust 2015-ON1 (an indirect subsidiary of the Company, the “Issuer”), HLSS
Holdings, LLC (an indirect subsidiary of the Company, “HLSS”), Deutsche Bank National Trust Company (“Deutsche Bank”), PHH Mortgage Corporation (“PMC”), New Residential Mortgage LLC (a subsidiary of the Company, “NRM”), NewRez LLC d/b/a Shellpoint
Mortgage Servicing (a subsidiary of the Company, “Shellpoint”), and Credit Suisse AG, New York Branch (“Credit Suisse”) entered into a financing transaction pursuant to which the Issuer issued $400,000,000 of rated receivables backed term notes (the
“Series 2019-T2 Notes”).
The Series 2019-T2 Notes are all issued under that certain Third Amended and Restated Indenture, dated as of July 25, 2019, by and among the Issuer, Deutsche Bank, HLSS,
Credit Suisse, PMC, NRM and Shellpoint (the “Indenture”) and the Series 2019-T2 Indenture Supplement thereto among the parties to the Indenture and the Company (the “Indenture Supplement”). A copy of the Indenture Supplement is attached to this
Current Report on Form 8-K as Exhibit 4.1 and is incorporated by reference herein.
The proceeds of the Series 2019-T2 Notes were used to redeem the Series 2016-T4 Notes issued by the Issuer.
The Series 2019-T2 Notes are secured by servicer advance receivables made by PMC, Shellpoint and NRM and accrued and unpaid servicing fees payable under certain identified
residential mortgage loan servicing agreements. The collateral securing the Series 2019-T2 Notes cross-collateralizes four other series of outstanding notes previously issued by the Issuer.
The Series 2019-T2 Notes bear fixed interest, varying by class, ranging from 2.52% to 4.39% per annum. The revolving period for the Series 2019-T2 Notes ends on August
15, 2023. If the Series 2019-T2 Notes are still outstanding at the end of the revolving period, the Issuer will be required to repay one-twelfth of the remaining principal balance of the Series 2019-T2 Notes each month until the principal balance of
the Series 2019-T2 Notes is paid in full.
The events of default and target amortization events under the Series 2019-T2 Notes include customary events such as: (i) failure to satisfy an interest coverage test,
(ii) failure to satisfy a collateral performance test measuring the ratio of collected advance reimbursements to the balance of advances; (iii) failure to deliver certain reports; (iv) material breaches of any of the transaction documents (subject to
applicable cure periods), (v) non‑payment of principal, interest or other amounts when due, (vi) insolvency of PMC, HLSS, Shellpoint, NRM or the subsidiaries of HLSS party to the transaction documents; (vii) the Issuer becoming subject to registration
as an “investment company” within the meaning of the 1940 Act; and (viii) PMC, Shellpoint or NRM failing to comply with the deposit and remittance requirements set forth in any pooling and servicing agreement or such definitive documents.
Upon the occurrence of an event of default or a target amortization event (including because of the end of the related revolving period) in respect of the Series 2019-T2
Notes, there is either an interest rate increase on the Series 2019-T2 Notes, a rapid amortization of all or a portion of the Series 2019-T2 Notes or an acceleration of principal repayment, or all of the foregoing.
Upon the occurrence and during the continuance of an event of default under the facility, the requisite percentage of the related noteholders may declare the Series
2019-T2 Notes and all other obligations of the applicable issuer immediately due and payable and may terminate the commitments. A bankruptcy event of default causes such obligations automatically to become immediately due and payable and the
commitments automatically to terminate.
The definitive documents related to the Series 2019-T2 Notes contain customary representations and warranties, as well as affirmative and negative covenants. Affirmative
covenants include, among others, reporting requirements, provision of notices of material events, maintenance of existence, maintenance of books and records, compliance with laws, compliance with covenants under the designated servicing agreements and
maintaining certain servicing standards with respect to the advances and the related mortgage loans. Negative covenants include, among others, limitations on amendments to the designated servicing agreements and limitations on amendments to the
procedures and methodology for repaying the advances or determining that advances have become non-recoverable.