S&P assigns B to Mr. Cooper notes

S&P said it assigned its B issue-level and 4 recovery ratings to Mr. Cooper Group Inc.'s $500 million of 5% senior notes due 2026, which it assumed upon acquiring Home Point Capital for a purchase price of $324 million. The 4 recovery rating indicates average recovery (30%-50%; rounded estimate: 45%) in default.

“We believe the additional leverage for Mr. Cooper is manageable, given steady earnings from Home Point's $84 billion servicing portfolio will largely offset it. Pro forma for the transaction, we expect Mr. Cooper's leverage to be mostly unchanged and debt to adjusted EBITDA to remain 5.5x-6x,” S&P said in a press release.

The outlook is stable.

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