Terms

Series

7.125% Series B Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock

Liquidation Preference

$25.00

Coupon Rate

7.125%

Rate Type

Fixed To Floating

Annual Dividend

$1.78

Payment Frequency

Quarterly

Cumulative

Yes

Perpetual

Yes

Convertible

Yes

Callable

Yes

First Call Date

August 15, 2024

First Call Price

$25.00

Capital Stack Ranking

Junior To: All Existing And Future Indebtedness, Other Liabilities Of The Company And Its Subsidiaries, All Liabilities And Preferred Equity Of Subsidiaries; Pari Passu With: Series A Preferred Stock (7.50% Series A Fixed-To-Floating Rate Cumulative Redeemable Preferred Stock), All Other Parity Preferred Equity; Senior To: Common Stock, Equity Securities Expressly Designated As Subordinated To Series B Preferred Stock

Regulatory (Basel III) Call

No

Tax Classification

Reit Passthrough

Qualifies for QDI

No

Qualifies for DRD

No

Shares Offered

10,000,000

Prospectus Summary

New Residential Investment Corp. (NYSE: NRZ), a publicly traded REIT focused on residential real estate investments, is offering 10,000,000 shares of its 7.125% Series B Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock at a $25.00 liquidation preference per share. The stock pays a fixed 7.125% per annum ($1.78125 annually, or approximately $0.4453 per quarter) through August 15, 2024, then converts to a floating rate of three-month LIBOR plus 565 basis points. The first optional redemption date is August 15, 2024 at $25.00 per share. This security is cumulative, meaning any missed dividends accrue and must be paid in full before any distributions can be made to common stockholders. The Series B Preferred Stock sits above common equity but below all debt and other liabilities in the capital stack. As of June 30, 2019, New Residential and its subsidiaries carried approximately $26.9 billion in indebtedness and liabilities ranking senior to these preferred shares. Critically, as a holding company issue, the Series B Preferred Stock is effectively junior to all liabilities and any preferred equity of New Residential's operating subsidiaries, which are separate legal entities with no obligation to upstream funds. There is no traditional bank regulatory capital call; however, the issuer may redeem shares early (prior to August 2024) if necessary to preserve its REIT qualification for U.S. federal income tax purposes, or upon a Change of Control within 120 days of such event. At the $25.00 offering price, the fixed-period yield is 7.125% through August 2024. Because New Residential is a REIT, dividends are generally characterized as ordinary income for tax purposes rather than qualified dividend income (QDI), meaning they typically do not benefit from the 15%/20% preferential tax rate available on qualified dividends, nor does the dividends-received deduction (DRD) apply for corporate holders. Dividends are paid quarterly on or about February 15, May 15, August 15, and November 15. Existing or future debt covenants may restrict dividend payments; additionally, if six or more quarterly dividends are missed (whether or not consecutive), preferred holders gain the right to elect two additional directors to the board, providing a governance remedy but not a payment guarantee.

Summarized from the SEC prospectus filing.

Distribution History

Floating Rate Terms

Conversion Terms

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If New Residential fails to pay dividends on the Series B Preferred Stock for six or more quarterly periods, holders gain the right to elect two additional board directors. Additionally, certain existing or future debt instruments may restrict the company from paying dividends on the preferred stock. The preferred stock itself ranks senior to common stock for dividends, meaning common dividends cannot be paid if preferred dividends are in arrears.

Other Preferreds from Rithm Capital Corp.

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 42 (Average)