S&P revises Mr. Cooper view to stable, rates notes B

S&P said it revised the outlook for Mr. Cooper Group Inc. to stable from negative and assigned a B rating to the proposed $600 million senior unsecured debt issuance by its subsidiary Nationstar Mortgage. The recovery rating is 3, indicating an expectation of a meaningful recovery (55%) in the event of default. The agency also revised the recovery rating on the existing unsecured notes to 3 from 4.

Proceeds along with cash will be used to redeem $492 million of notes due 2021 and $206 million of notes due 2022.

The outlook reflects S&P’s expectation for leverage of 4x-5x, EBITDA interest coverage of 2.5x-3x, and debt to tangible equity of 1.5x-2x. The outlook also reflects Mr. Cooper’s existing market position in mortgage servicing.

S&P affirmed Mr. Cooper’s B rating.

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