S&P Global Ratings affirmed its B+ issuer credit rating on Nationstar Mortgage LLC after its parent company, Nationstar Mortgage Holdings Inc., entered into a merger agreement with WMIH Corp.
As a result of the agreement, S&P believes that Nationstar, which it expects to comprise the entirety of the operating businesses of WMIH at close, will maintain its relatively strong market position as one of the largest nonbank mortgage servicers in the U.S.
S&P expects leverage to increase as part of the transaction. However, the rating already reflects the expectation for higher leverage because of Nationstar's majority financial sponsor ownership by funds of Fortress Investment Group LLC, and so the additional debt burden at close is neutral to the rating.
The stable outlook on Nationstar reflects the company's existing market position in mortgage origination and servicing. S&P expects the company to maintain leverage, as measured by debt to EBITDA, between 4.0x and 5.0x.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.