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Moody's downgrades New Residential amid changes in capital structure

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Moody's downgrades New Residential amid changes in capital structure

Moody's has downgraded New Residential Investment Corp.'s issuer rating to B2 from B1 and affirmed the company's B1 corporate family rating with a stable outlook.

The ratings action reflects changes to the company's capital structure, including an increase in the amount of the company's senior secured mortgage servicing rights financing since the assignment of the issuer rating, Moody's said.

The agency said the company's ratings reflect a strong capital position, above-average profitability and moderate potential volatility of cash flows. However, the agency believes that the ratings are constrained by the company's reliance on subservicers; evolving strategic direction; dependence on short-term funding; and monoline focus of investing in mortgage servicing assets of legacy, pre-crisis originated mortgages.