Kroll Bond Rating Agency on May 28 placed RoundPoint Mortgage Servicing Corp.'s BB issuer rating on Watch Developing following its planned merger into Freedom Mortgage Corp.

The rating agency said the deal will result in a larger company with "meaningful synergies," which will enable combined operations to attain greater scale in the market. The Watch Developing status reflects Kroll's view on the uncertainty of Freedom Mortgage's credit profile and the financial strength of the combined companies, on a pro forma basis.

Kroll plans to resolve the Watch Developing status once the deal closes.

Freedom Mortgage's acquisition of RoundPoint is expected to close in the third or fourth quarter. The companies said the combined entity's owned and subserviced mortgage servicing rights portfolio will be more than $300 billion.