DEBT OBLIGATIONS

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

DEBT OBLIGATIONS

DEBT OBLIGATIONS

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

	September 30, 2023															December 31, 2022
									Collateral
Debt Obligations/Collateral(C)	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
Repurchase Agreements:
Warehouse Credit Facilities-Residential Mortgage Loans(F)	$	2,155,544	$	2,155,092	Oct-23 to Mar-25	7.3	%	0.7	$	2,565,299	$	2,586,513	$	2,482,541	17.8	$	2,601,327
Warehouse Credit Facilities-Mortgage Loans Receivable(E)	1,212,156		1,212,156		Dec-23 to May-24	8.2	%	0.3	1,473,515		1,471,904		1,471,904		1.1	1,220,662
Agency RMBS or U.S. Treasury Bills(D)	9,653,355		9,653,355		Oct-23 to Feb-24	5.4	%	0.2	9,731,596		9,546,319		9,870,841		8.1	6,821,788
Non-Agency RMBS(E)	574,346		574,346		Oct-23 to Oct-27	7.3	%	0.8	13,600,138		882,800		880,999		6.2	609,282
SFR Properties(E)	10,431		10,431		Dec-24	7.8	%	1.2	N/A		32,899		32,899		N/A	4,677
Total Secured Financing Agreements	$	13,605,832	$	13,605,380		6.0	%	0.3								$	11,257,736
Secured Notes and Bonds Payable
Excess MSRs(G)	193,432		193,432		Aug-25	8.8	%	1.9	61,988,328		239,154		278,059		6.3	227,596
MSRs(H)	4,200,200		4,191,504		Nov-23 to Mar-28	6.9	%	1.7	523,532,413		6,317,954		8,616,793		7.9	4,791,543
Servicer Advance Investments(I)	275,952		275,142		Mar-24 to Aug-24	7.5	%	0.4	314,165		361,325		387,669		8.6	318,445
Servicer Advances(I)	2,091,447		2,091,185		Nov-23 to Nov-24	7.6	%	0.5	2,555,898		2,434,266		2,434,266		0.7	2,361,259
Residential Mortgage Loans(J)	650,000		650,000		May-24	6.5	%	0.6	654,975		655,576		658,402		29.2	769,988
Consumer Loans(K)	1,303,517		1,269,768		Jun-28 to Sep 37	7.1	%	4.5	1,475,494		1,422,559		1,436,080		1.7	299,498
SFR Properties(L)	833,387		786,596		Mar-26 to Sep-27	4.1	%	3.6	N/A		956,118		956,118		N/A	817,695
Mortgage Loans Receivable(M)	524,062		507,228		Jul 26 to Dec-26	5.7	%	3.1	567,432		567,432		567,432		0.6	512,919
Total Secured Notes and Bonds Payable	$	10,071,997	$	9,964,855		6.8	%	1.9								$	10,098,943
Total/ Weighted Average	$	23,677,829	$	23,570,235		6.4	%	1.0								$	21,356,679

(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 $199.5 million of associated accrued interest payable as of September 30, 2023.

(D)Includes $974.0 million face amount of repurchase agreements collateralized by U.S. Treasury Bills. All repurchase agreements have a fixed rate. Collateral carrying value includes margin deposits.

(E)All SOFR-based floating interest rates. Collateral carrying value includes margin deposits.

(F)Includes $244.3 million which bear interest at an average fixed rate of 5.1% with the remaining having SOFR-based floating interest rates.

(G)Includes $193.4 million of corporate loans which bear interest at the sum of one-month SOFR plus a margin of 3.4%.

(H)Includes $2.7 billion of MSR notes which bear interest equal to the sum of (i) a floating rate index equal to one-month SOFR, and (ii) a margin ranging from 2.5% to 3.7%; and $1.5 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.

(I)Includes debt bearing interest equal to the sum of (i) a floating rate index equal to one-month SOFR, and (ii) a margin ranging from 1.5% to 3.7%. Collateral includes servicer advance investments, as well as servicer advances receivable related to the MSRs and MSR financing receivables owned by NRM and the Mortgage Company.

(J)Represents $650.0 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 SOFR plus 1.2%. Collateral carrying value includes cash held in the securitization trust required to meet collateral requirements.

(K)Includes (i) SpringCastle debt, which is primarily composed of the following classes of asset-backed notes held by third parties: $220.9 million UPB of Class A notes with a coupon of 2.0% and $53.0 million UPB of Class B notes with a coupon of 2.7% and (ii) $1.0 billion of debt collateralized by the Marcus loans bearing interest at the sum of one-month SOFR plus a margin of 3.0%.

(L)Includes $833.4 million of fixed rate notes which bear interest ranging from 3.5% to 7.1%.

(M)Includes $238.1 million which bear interest at an average fixed rate of 4.7% with the remaining having SOFR-based floating interest rates.

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 September 30, 2023, Rithm Capital has margin exposure on $13.6 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 Properties		Mortgage Loans Receivable		Total
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
Secured Financing Agreements
Borrowings	—		—		—		34,530,433		28,858,739		—		10,431		1,756,295		65,155,898
Repayments	—		—		—		(31,733,802)		(29,306,544)		—		(4,677)		(1,764,800)		(62,809,823)
Capitalized deferred financing costs, net of amortization	—		—		—		—		1,570		—		—		—		1,570
Secured Notes and Bonds Payable
Borrowings	—		1,753,504		1,955,228		—		—		1,185,612		—		—		4,894,344
Repayments	(34,164)		(2,353,301)		(2,271,757)		—		(116,730)		(212,867)		(35,690)		—		(5,024,509)
Discount on borrowings, net of amortization	—		—		—		—		—		—		—		—		—
Unrealized gain on notes, fair value	—		—		—		—		(3,258)		3,058		—		(5,692)		(5,892)
Capitalized deferred financing costs, net of amortization	—		(242)		3,152		—		—		(5,533)		4,591		—		1,968
Balance at September 30, 2023	$	193,432	$	4,191,504	$	2,366,327	$	10,227,701	$	2,805,092	$	1,269,768	$	797,027	$	1,719,384	$	23,570,235

(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 September 30, 2023 are as follows:

Year Ending	Nonrecourse(A)		Recourse(B)		Total
October 1 through December 31, 2023	$	—	$	8,934,533	$	8,934,533
2024	3,054,577		6,241,670		9,296,247
2025	—		1,814,895		1,814,895
2026	—		1,725,498		1,725,498
2027	734,738		245,000		979,738
2028 and thereafter	1,303,518		173,400		1,476,918
	$	5,092,833	$	19,134,996	$	24,227,829

(A)Includes secured notes and bonds payable of $5.1 billion.

(B)Includes secured financing agreements and secured notes and bonds payable of $13.6 billion and $5.5 billion, respectively. Secured financing agreements with contractual maturities prior to December 31, 2023 includes $9.7 billion collateralized by Agency RMBS or U.S. Treasury Bills.

Borrowing Capacity

The following table represents borrowing capacity as of September 30, 2023:

Debt Obligations / Collateral	Borrowing Capacity		Balance Outstanding		Available Financing(A)
Secured Financing Agreements
Residential mortgage loans and REO	$	5,604,816	$	2,186,023	$	3,418,793
Loan originations	6,827,000		1,192,108		5,634,892
Secured Notes and Bonds Payable
Excess MSRs	286,380		193,432		92,948
MSRs	7,068,200		4,200,200		2,868,000
Servicer advances	3,880,000		2,367,399		1,512,601
Residential mortgage loans	296,762		195,411		101,351
	$	23,963,158	$	10,334,573	$	13,628,585

(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. Rithm Capital was in compliance with all of its debt covenants as of September 30, 2023.

2025 Senior Unsecured Notes

On September 16, 2020, the Company, as issuer, 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
2023	101.563%
2024 and thereafter	100.000%

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 three months ended September 30, 2023, the Company recognized interest expense of $8.7 million. At September 30, 2023, the unamortized debt issuance costs was approximately $3.6 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 Indenture, dated September 16, 2020, pursuant to

which the 2025 Senior Notes were issued) 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 September 30, 2023, 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.