Rithm will publicly offer up to 34.5M shares of common stock

New York-based asset manager Rithm Capital, the owner of multichannel lender Newrez, announced on Tuesday that it plans to raise money for “general corporate purposes” by selling up to 34.5 million shares of common stock to investors in a public offering.

The company said underwriters will offer shares from time to time in negotiated transactions or prevailing market prices at the time of sale. At current market prices, the offering would bring the company about $395 million, without consideration of the expenses of the public offering.

Rithm said that the proceeds of the offering will go toward general corporate purposes, which may include future acquisitions, investments or debt repayments.

Rithm Capital, previously a real estate investment trust (REIT), has changed course to become an asset manager, which resulted in the acquisition of Sculptor Capital Management for $719.8 million in November 2023 and a deal with Great Ajax Corp. in June 2024.

In the mortgage space, the firm struck a deal with Computershare Mortgage Services Inc. for $720 million in October 2023, which included the purchase of Specialized Loan Servicing LLC.  

Rithm is offering 30 million shares of its common stock, subject to market conditions, but will give investors the option to purchase an additional 4.5 million shares for 30 days. 

Rithm’s stock closed at $11.81 on Tuesday, up 0.25% from the previous day. But in after-market hours, when the offering became public, the stock fell more than 3%. 

Six banks are joint book-running managers for the offering, including Citigroup, Goldman Sachs, J.P. Morgan, UBS Investment Bank, BTIG and Wells Fargo Securities.  

At the end of June, Rithm had $1.5 billion of total cash and liquidity.

According to filings with the Securities and Exchange Commission (SEC), the company announced a $213.2 million GAAP net income in the second quarter of 2024, compared to $261.6 million in the prior quarter.

Earlier this year, the company issued $775 million in senior unsecured notes due in 2029 for qualified institutional buyers.