(Bloomberg) -- New Residential Investment Corp., a real estate investment trust focused on housing, is selling a portfolio of debt with a face of $6 billion, according to people with knowledge of the matter.
The REIT, managed by an affiliate of Fortress Investment Group LLC, has been selling the non-agency debt over the past week to a range of institutional investors, with the transactions expected to be finalized Tuesday, said one of the people, who asked not to be identified because the deals are private. A New Residential representative declined to comment.
The loans were sold at a discount, said one of the people. The exact pricing couldn’t immediately be learned. New Residential, which has seen its stock sink more than 65% this year, has a market of about $2.2 billion. Earlier Tuesday, the New York-based REIT said it would cut its quarterly dividend 90% to preserve liquidity.
The U.S. mortgage market has been roiled by the coronavirus pandemic, leading firms to quickly unload billions of dollars in mortgage-backed securities to meet investor redemptions and manage liquidity issues. While the Federal Reserve is buying up mortgage debt, the effort is focused on securities consisting of so-called agency loans that were created with help from the federal government -- different from New Residential’s non-agency debt.
“Conditions created by the Covid-19 pandemic have greatly impacted the mortgage REIT industry,” Chief Executive Officer Michael Nierenberg said in a statement. “Market dislocations have put significant downward pressure on asset s. In light of these events, we have made a number of decisions to de-risk, increase liquidity and protect our book . We continue to focus on growing liquidity as we navigate the market during this time.”
The company said its book has declined about 25% to 30% since the end of last year.
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