DEBT OBLIGATIONS

12 Months Ended

Dec. 31, 2022

Debt Disclosure [Abstract]

DEBT OBLIGATIONS

DEBT OBLIGATIONS

The following table summarizes Secured Financing Agreements and Secured Notes and Bonds Payable debt obligations:

	December 31, 2022																December 31, 2021
										Collateral
Debt Obligations/Collateral	Outstanding Face Amount		Carrying Value(A)		Final Stated Maturity(B)	Weighted Average Funding Cost		Weighted Average Life (Years)		Outstanding Face		Amortized Cost Basis		Carrying Value		Weighted Average Life (Years)	Carrying Value(A)
Secured Financing Agreements(C)
Repurchase Agreements:
Warehouse Credit Facilities-Residential Mortgage Loans(F)	$	2,603,833	$	2,601,327	Feb-23 to Jan-25	5.9	%	0.8		$	3,187,716	$	3,114,791	$	3,020,575	21.3	$	10,138,297
Warehouse Credit Facility- Mortgage Loans Receivable(G)	1,220,662		1,220,662		Mar-23 to Dec-23	6.9	%	0.6		1,451,279		1,451,279		1,451,279		0.8	1,252,660
Agency RMBS(D)	6,821,788		6,821,788		Jan-23 to Feb-23	4.1	%	0.1		7,213,920		7,082,133		7,123,127		8.5	8,386,538
Non-Agency RMBS(E)	609,282		609,282		Jan-23 to Oct-27	6.5	%	1.1		14,824,678		946,631		946,197		7.1	656,874
SFR Properties(E)	4,677		4,677		Dec-24	7.1	%	2.0		N/A		7,765		7,765		NA	158,515
Total Secured Financing Agreements	11,260,242		11,257,736			5.0	%	0.4									20,592,884
Secured Notes and Bonds Payable
Excess MSRs(H)	227,596		227,596		Aug-25	3.7	%	2.6		67,454,370		260,828		317,146		6.1	237,835
MSRs(I)	4,800,001		4,791,543		Mar-23 to Nov-27	6.1	%	2.4		532,218,484		6,811,636		8,833,825		6.9	4,234,771
Servicer Advance Investments(J)	319,276		318,445		Aug-23 to Mar-24	6.5	%	1.2		341,628		392,749		398,820		8.4	355,722
Servicer Advances(J)	2,364,757		2,361,259		Feb-23 to Nov-26	4.1	%	1.1		2,847,234		2,825,485		2,825,485		0.7	2,355,969
Residential Mortgage Loans(K)	770,897		769,988		May-24 to Jul-43	5.4	%	1.9		775,314		791,534		791,534		28.5	802,526
Consumer Loans(L)	330,772		299,498		Sep-37	2.1	%	3.3		330,397		343,947		363,725		3.5	458,580
SFR Properties	863,029		817,695		Mar-23 to Sep-27	3.6	%	3.8		N/A		963,547		963,547		N/A	199,407
Mortgage Loans Receivable	524,062		512,919		Jul 26 to Dec-26	5.4	%	3.8		569,486		569,486		569,486		0.6	—
Total Secured Notes and Bonds Payable	10,200,390		10,098,943			5.2	%	2.2	0								8,644,810
Total/Weighted Average	$	21,460,632	$	21,356,679		5.1	%	1.2		$	631,214,506	$	25,561,811	$	27,612,511		$	29,237,694

(A)Net of deferred financing costs.

(B)All debt obligations with a stated maturity through the date of issuance were refinanced, extended or repaid.

(C)Includes approximately $80.5 million of associated interest payable as of December 31, 2022.

(D)All fixed interest rates.

(E)All LIBOR or SOFR-based floating interest rates.

(F)Includes $278.6 million which bear interest at an average fixed interest rate of 5.1% with the remaining having LIBOR or SOFR-based floating interest rates.

(G)All LIBOR or SOFR-based floating interest rates.

(H)Includes $227.6 million of corporate loans which bear interest at a fixed interest rate of 3.7%.

(I)Includes $3.0 billion of MSR notes which bear interest equal to the sum of (i) a floating rate index equal to one-month LIBOR or SOFR, and (ii) a margin ranging from 2.5% to 3.3%; and $1.8 billion of capital market notes with fixed interest rates ranging 3.0% to 5.4%. The outstanding face amount of the collateral represents the UPB of the residential mortgage loans underlying the MSRs and MSR Financing Receivables securing these notes.

(J)$1.2 billion face amount of the notes has a fixed rate while the remaining notes bear interest equal to the sum of (i) a floating rate index equal to one-month LIBOR or a cost of funds rate, as applicable, and (ii) a margin ranging from 1.2% to 3.3%. Collateral includes Servicer Advance Investments, as well as servicer advances receivable related to the MSRs and MSR Financing Receivables owned by NRM.

(K)Represents (i) $20.9 million of SAFT 2013-1 mortgage-backed securities issued with fixed interest rate of 3.7% and (ii) $750.0 million securitization backed by a revolving warehouse facility to finance newly originated first-lien, fixed- and adjustable-rate residential mortgage loans which bears interest equal to one-month LIBOR plus 1.1%.

(L)Includes the SpringCastle debt, comprising the following classes of asset-backed notes held by third parties: $277.7 million UPB of Class A notes with a coupon of 2.0% and a stated maturity date in September 2037 and $53.0 million UPB of Class B notes with a coupon of 2.7% and a stated maturity date in September 2037 (collectively, “SCFT 2020-A”).

As of December 31, 2022, Rithm Capital had no outstanding secured financing agreements where the amount at risk with any individual counterparty or group of related counterparties exceeded 10% of Rithm Capital’s stockholders’ equity. The amount at risk under secured financing agreements is defined as the excess of carrying amount (or market value, if higher than the

carrying amount) of the securities or other assets sold under agreement to repurchase, including accrued interest plus any cash or other assets on deposit to secure the repurchase obligation, over the amount of the repurchase liability (adjusted for accrued interest).

General

Certain of the debt obligations included above are obligations of Rithm Capital’s consolidated subsidiaries, which own the related collateral. In some cases, such collateral is not available to other creditors of Rithm Capital.

As of December 31, 2022, Rithm Capital has margin exposure on $11.3 billion of secured financing agreements. To the extent that the value of the collateral underlying these secured financing agreements declines, Rithm Capital may be required to post margin, which could significantly impact its liquidity.

The following table summarizes activities related to the carrying value of debt obligations:

	Excess MSRs		MSRs		Servicer Advances(A)		Real Estate Securities		Residential Mortgage Loans and REO		Consumer Loans		SFR		Mortgage Loans Receivable		Total
Balance at December 31, 2020	$	275,088	$	2,691,791	$	3,008,719	$	13,499,636	$	5,082,296	$	628,759	$	5,586	$	—	$	25,191,875
Secured Financing Agreements
Acquired borrowings, net of discount (Note 3)	—		—		—		—		7,090,577		—		—		—		7,090,577
Borrowings	—		—		—		64,749,425		129,676,976		—		199,713		1,278,647		195,904,761
Repayments	—		—		—		(69,206,600)		(130,719,004)		—		—		(25,987)		(199,951,591)
Capitalized deferred financing costs, net of amortization	—		—		—		951		812		—		(306)		—		1,457
Secured Notes and Bonds Payable
Acquired borrowings, net of discount	—		1,045,000		76,772		—		—		—		—		—		1,121,772
Borrowings	—		4,042,325		2,971,974		—		796,849		—		152,929		—		7,964,077
Repayments	(37,253)		(3,549,148)		(3,346,873)		—		(974,176)		(170,623)		—		—		(8,078,073)
Unrealized (gain) loss on notes, fair value	—		—		—		—		(13,435)		444		—		—		(12,991)
Capitalized deferred financing costs, net of amortization	—		4,803		1,099		—		(72)		—		—		—		5,830
Balance at December 31, 2021	$	237,835	$	4,234,771	$	2,711,691	$	9,043,412	$	10,940,823	$	458,580	$	357,922	$	1,252,660	$	29,237,694
Secured Financing Agreements
Borrowings	—		—		—		54,385,892		73,782,327		—		206,595		2,080,495		130,455,309
Repayments	—		—		—		(55,998,234)		(81,320,424)		—		(360,433)		(2,112,492)		(139,791,583)
Capitalized deferred financing costs, net of amortization	—		—		—		—		1,128		—		—		—		1,128
Secured Notes and Bonds Payable
Borrowings	—		2,027,637		2,804,677		—		—		—		879,947		524,062		6,236,323
Repayments	(10,239)		(1,473,037)		(2,839,257)		—		(33,204)		(123,770)		(216,631)		—		(4,696,138)
Discount on borrowings, net of amortization	—		—		—		—		—		—		(42,030)		—		(42,030)
Unrealized (gain) loss on notes, fair value	—		—		—		—		665		(35,312)		—		(11,144)		(45,791)
Capitalized deferred financing costs, net of amortization	—		2,172		2,593		—		—		—		(2,998)		—		1,767
Balance at December 31, 2022	$	227,596	$	4,791,543	$	2,679,704	$	7,431,070	$	3,371,315	$	299,498	$	822,372	$	1,733,581	$	21,356,679

(A)Rithm Capital net settles daily borrowings and repayments of the Secured Notes and Bonds Payable on its servicer advances.

Maturities

Contractual maturities of debt obligations as of December 31, 2022:

Year Ending	Nonrecourse(A)		Recourse(B)		Total
2023	$	1,359,547	$	11,464,276	$	12,823,823
2024	2,143,523		1,865,962		4,009,485
2025	—		2,017,629		2,017,629
2026	—		1,798,784		1,798,784
2027 and thereafter	1,080,910		280,000		1,360,910
	$	4,583,980	$	17,426,651	$	22,010,631

(A)Includes secured notes and bonds payable of $4.6 billion.

(B)Includes secured financing agreements and secured notes and bonds payable of $11.2 billion and $6.2 billion, respectively.

Borrowing Capacity

The following table summarizes borrowing capacity as of December 31, 2022:

Debt Obligations/ Collateral	Borrowing Capacity		Balance Outstanding		Available Financing(A)
Secured Financing Agreements
Residential mortgage loans and REO	$	4,284,838	$	1,978,037	$	2,306,801
Loan originations	12,461,331		1,851,134		10,610,197
Secured Notes and Bonds Payable
Excess MSRs	286,380		227,596		58,784
MSRs	5,806,207		4,800,001		1,006,207
Servicer advances	3,245,669		2,684,033		561,636
Residential mortgage loans	290,714		224,504		66,210
	$	26,375,139	$	11,765,305	$	14,609,835

(A)Although available financing is uncommitted, Rithm Capital’s unused borrowing capacity is available if it has additional eligible collateral to pledge and meets other borrowing conditions as set forth in the applicable agreements, including any applicable advance rate.

Certain of the debt obligations are subject to customary loan covenants and event of default provisions, including event of default provisions triggered by certain specified declines in Rithm Capital’s equity or a failure to maintain a specified tangible net worth, liquidity, or indebtedness to tangible net worth ratio. Additionally, with the expected phase out of LIBOR, the Company expects the calculated rate on certain debt obligations will be changed to another published reference standard before the planned cessation of LIBOR quotations in 2023. However, the Company does not anticipate this change will have a significant effect on the terms and conditions, ability to access credit, or on its financial condition. Rithm Capital was in compliance with all of its debt covenants as of December 31, 2022.

2025 Senior Unsecured Notes

On September 16, 2020, the Company, as borrower, completed a private offering of $550.0 million aggregate principal amount of 6.250% senior unsecured notes due 2025 (the “2025 Senior Notes”). Interest on the 2025 Senior Notes accrue at the rate of 6.250% per annum with interest payable semi-annually in arrears on each April 15 and October 15.

The 2025 Senior Notes mature on October 15, 2025 and the Company may redeem some or all of the 2025 Senior Notes at the Company’s option, at any time from time to time, on or after October 15, 2022 at a price equal to the following fixed redemption prices (expressed as a percentage of principal amount of the 2025 Senior Notes to be redeemed):

Year	Price
2022	103.125%
2023	101.563%
2024 and thereafter	100.000%

Prior to October 15, 2022, the Company was entitled at its option on one or more occasions to redeem the 2025 Senior Notes in an aggregate principal amount not to exceed 40% of the aggregate principal amount of the 2025 Senior Notes originally issued prior to the applicable redemption date at a fixed redemption price of 106.250%.

Net proceeds from the offering were approximately $544.5 million, after deducting the initial purchasers’ discounts and commissions and estimated offering expenses payable by the Company. The Company incurred fees of approximately $8.3 million in relation to the issuance of the 2025 Senior Notes. These fees were capitalized as debt issuance cost and are grouped and presented as part of Unsecured Senior Notes, Net of Issuance Costs on the Consolidated Balance Sheets. For the year ended December 31, 2022, the Company recognized $34.4 million of interest expense. As of December 31, 2022, the unamortized debt issuance costs was approximately $4.9 million.

The 2025 Senior Notes are senior unsecured obligations and rank pari passu in right of payment with all of the Company’s existing and future senior unsecured indebtedness and senior unsecured guarantees. At the time of issuance, the 2025 Senior Notes were not guaranteed by any of the Company’s subsidiaries and none of its subsidiaries are required to guarantee the 2025 Senior Notes in the future, except under limited specified circumstances.

The 2025 Senior Notes contain financial covenants and other non-financial covenants, including, among other things, limits on the ability of the Company and its restricted subsidiaries to incur certain indebtedness (subject to various exceptions), requires that the Company maintain total unencumbered assets (as defined in the debt agreement) of not less than 120% of the aggregate principal amount of the outstanding unsecured debt, and imposes certain requirements in order for the Company to merge or consolidate with or transfer all or substantially all of its assets to another person, in each case subject to certain qualifications set forth in the debt agreement. If the Company were to fail to comply with these covenants, after the expiration of the applicable cure periods, the debt maturity could be accelerated or other remedies could be sought by the lenders. As of December 31, 2022, the Company was in compliance with all covenants.

In the event of a change of control, each holder of the 2025 Senior Notes will have the right to require the Company to repurchase all or any part of the outstanding balance at a purchase price of 101% of the principal amount of the 2025 Senior Notes repurchased, plus accrued and unpaid interest, if any, to, but not including, the date of such repurchase.