Rithm Capital Corp.

KBRA has assigned preliminary ratings to 10 classes of mortgage-backed notes from New Residential Mortgage Loan Trust 2026-NQM10, a $494.0 million non-prime RMBS transaction sponsored by Rithm Capital Corp., the publicly traded real estate investment trust formerly known as New Residential Investment Corp. The underlying mortgages in the pool were primarily originated by NewRez LLC at 56.6%, and all loans will be serviced by Shellpoint Mortgage Servicing, a brand and affiliate of NewRez LLC. The transaction is collateralized by a pool of 897 residential mortgages seasoned approximately two months, with borrowers carrying a non-zero weighted average original credit score of 757, a weighted average original loan-to-value of 72.5% and a weighted average combined loan-to-value of 72.5%. KBRA said its rating approach incorporated loan-level analysis of the mortgage pool through its Residential Asset Loss Model, an examination of third-party loan file due diligence results, cash flow modeling of the transaction's payment structure, reviews of key transaction parties and an assessment of the legal structure and documentation.

Rithm Capital Corp. announced the closing of a joint venture with a fund managed by DRA Advisors LLC for ownership of 1301 Avenue of the Americas, a flagship asset in the New York City office portfolio of Elecor Properties, Rithm's real estate operating platform. Rithm, through Elecor, will continue to hold majority ownership of the asset and operate the building on behalf of the joint venture, with terms of the transaction not disclosed. The 45-story, 1.7 million-square-foot Midtown Manhattan tower is currently fully leased, with major tenants including KeyBank, Piper Sandler, Crédit Agricole, and O'Melveny & Myers LLP, and features a recently renovated 32,000-square-foot private club, The Aurelian. Rithm acquired Elecor and its portfolio of Class A office buildings in New York and San Francisco in December 2025, and said it intends to pursue similar capital partnerships across the portfolio going forward. Newmark Group acted as exclusive real estate advisor and HSF Kramer served as legal counsel to Rithm.

U.S. mortgage rates have climbed above 7% for the first time in more than a year, according to Mortgage News Daily, renewing investor focus on the outlook for mortgage real estate investment trusts. The move reflects higher long-term Treasury yields driven by renewed inflation concerns, elevated energy prices and resilient economic data, which have reinforced expectations that monetary policy will remain restrictive for longer. For mREITs such as AGNC Investment Corp., Annaly Capital Management, Starwood Property Trust and Rithm Capital, the impact varies considerably depending on portfolio composition, funding costs, prepayment trends, hedging strategies and the pace of interest-rate movements. Slower prepayments can help mREITs retain higher-yielding assets for longer and reduce premium amortization, but sharp increases in yields or wider mortgage-backed securities spreads can weigh on book values, while lower prepayment speeds lengthen portfolio duration and raise extension risk. AGNC Investment remains highly sensitive to Treasury yields and agency MBS spreads due to its concentrated agency MBS portfolio, Annaly Capital's more diversified mix across agency mortgages, residential credit and mortgage servicing rights may offer greater flexibility, Starwood Property Trust is more exposed to commercial real estate credit, and Rithm Capital may benefit from slower prepayments through its large mortgage-servicing portfolio even as high rates curb origination volumes.

Rithm Capital reported second-quarter earnings that exceeded Wall Street expectations, driven by strong inflows into its asset management business. Earnings available for distribution came in at $0.60 per share, beating the consensus estimate of $0.50 and up from $0.51 in the first quarter. Revenue of $1.28 billion missed the $1.42 billion consensus and declined from $1.38 billion in the prior quarter, though asset management revenue rose to $142.2 million from $106.6 million and commercial real estate revenue edged up to $182.1 million from $178.3 million. Assets under management in the asset management segment reached approximately $61 billion as of June 30, 2026, up from $59 billion at the end of the first quarter, including $1.9 billion of gross inflows and new fund commitments. The Newrez unit posted a 22% annualized operating return on equity on $5.7 billion of equity, while total servicing unpaid principal balance slipped to $865.2 billion from $875.0 billion. Book value per share declined to $12.33 from $12.51 at the end of the prior quarter.

Rithm Capital stock appears undervalued on earnings multiples, passing all six valuation tests, yet ongoing funding needs keep risk in focus. The company trades at a price-to-earnings ratio of 8.6 times, well below the mortgage REIT industry average of 12.0 times and a modelled fair P/E of 15.7 times. Recent activity, including a public equity raise at Rithm Property Trust and a US$500 million Manhattan office refinancing, highlights capital requirements that may weigh on sentiment. The key question is whether the current discount represents a genuine mispricing or a fair cushion for execution and funding risks.

Rithm Capital is moving beyond a balance-sheet-heavy mortgage and real estate model by expanding its asset management platform, which had roughly $59 billion of assets under management as of March 31, 2026, up from $35 billion a year earlier. Sculptor and Crestline are central to this push, with combined managed assets of roughly $60 billion and additional fundraising underway. The company aims to build more scalable, fee-based earnings that are less dependent on deploying balance-sheet capital, contrasting with income tied to mortgage assets and fair-value changes. Newrez, Rithm's largest business, generated $273.7 million of pre-tax operating income in the first quarter of 2026, while technology-driven cost efficiencies reduced servicing costs per loan to $51 from $54 in the prior quarter. However, macro exposure remains significant, with nearly 20% of total assets tied to mortgage servicing rights and related financing receivables, and the company reported a $204.2-million negative fair-value change in those assets during the quarter. RITM currently carries a Zacks Rank #3 (Hold), and shares have declined 18.1% over the past year.

S&P Global declared a third-quarter 2026 cash dividend of $0.97 per share, payable September 10 to shareholders of record August 26, with an annualized rate of $3.88. Applied Industrial Technologies declared a quarterly cash dividend of $0.51 per share, payable August 31 to shareholders of record August 14. Korn Ferry declared a cash dividend of $0.55 per share, payable July 31 to shareholders of record July 6, and noted it repurchased 1.2 million shares during the quarter, bringing fiscal 2026 buybacks to 1.8 million shares. Rithm Capital declared a second-quarter 2026 common stock dividend of $0.25 per share, payable July 31 to shareholders of record July 2. Reaves Utility Income Fund announced a 5% increase in its annual distribution to $2.52, paid monthly at $0.21 per share, representing an annualized distribution rate of 6.12% based on a market price of $41.18 and net asset value of $41.86 as of June 17.

Rithm Capital Corp. declared its second quarter 2026 common and preferred stock dividends. The common stock dividend is $0.25 per share, payable on July 31, 2026 to shareholders of record on July 2, 2026. Preferred dividends were declared for six series: Series A at $0.6206601 per share, Series B at $0.6103101, Series C at $0.5674407, Series D at $0.4375000, Series E at $0.5468750, and Series F at $0.5468750, all payable on August 17, 2026 to preferred shareholders of record on August 1, 2026 with an effective record date of July 31, 2026.