Nationstar Mortgage Holdings Inc. (NSM) said its wholly-owned unit, Nationstar Mortgage LLC, would acquire around $215 billion in residential mortgage servicing rights or "MSRs", as measured by unpaid principal balance or UPB as of November 30, 2012, and certain other assets from Bank of America (BAC).
Nearly 47% of the servicing portfolio, as measured by UPB, comprising loans that are owned, insured or guaranteed by Fannie Mae, Freddie Mac, and Ginnie Mae, with some 53% of the portfolio including loans in private-label securitizations. With this transaction, Nationstar hopes to add over 1.3 million customers to an existing customer base of 1.2 million. Nationstar's total servicing portfolio is about $425 billion, pro-forma for this transaction plus an additional $13 billion Bank of America government servicing portfolio purchase that closed in fourth quarter of 2012 and Nationstar's UPB as of September 30, 2012.
The purchase price for the mortgage servicing rights is about $1.3 billion. The MSR portfolio purchases would close as investor and other third-party approvals are received, which Nationstar expects the majority to occur in the first quarter of 2013. Also, Nationstar would be purchasing some $5.8 billion in related servicing advance receivables as the associated portfolios are boarded during 2013. Nationstar expects to sign third-party financing deals to fund the servicing advances.
Looking forward, Nationstar believes that this transaction would be accretive with incremental AEBITDA per share of $2.20 - $2.55 and earnings per share of $0.70 - $0.80 in 2013, and AEBITDA per share of $4.65 - $5.40 and earnings per share of $2.30 - $2.70 in 2014. Including the portfolio acquisitions, Nationstar projects total company AEBITDA per share of $9.50 - $11.05 and total company earnings per share of $3.70 - $4.35 in 2013, and AEBITDA per share of $12.30 - $14.30 and earnings per share of $5.60 - $6.50 in 2014.
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