Newcastle Acquires Interest in Consumer Loan Portfolio from HSBC
by Business Wire
Newcastle Investment Corp. (NYSE: NCT) announced today that it has signed a definitive agreement to acquire up to 50% of a $4.2 billion unpaid principal balance (“UPB”) portfolio of consumer loans from HSBC Finance Corporation (“HSBC”). Newcastle intends to co-invest alongside Springleaf Finance, Inc. (“Springleaf”), a Fortress affiliate, who will also be responsible for servicing the loans.
The total investment amount, based on UPB as of December 31, 2012, is approximately $3.2 billion. Newcastle expects to acquire up to a 50% interest in the portfolio and Springleaf, a leading national consumer finance company, will service the loans and purchase up to 50% of the loan balance pro rata alongside Newcastle. The consumer loan portfolio consists of over 400,000 personal homeowner loans and personal unsecured loans originated mainly through HSBC's Finance Corporation. The investment is expected to close in the second quarter of 2013, subject to closing conditions.
Kenneth Riis, the Company’s CEO commented, “We are very pleased to announce this opportunistic investment in consumer loans. We are excited to work with Springleaf as our partner in this transaction. Springleaf’s strong servicer performance on its existing consumer portfolio speaks to its ability to actively improve loan performance and drive attractive returns.”
Newcastle Investment Corp. focuses on opportunistically investing in, and actively managing, real estate related assets. The Company primarily invests in two distinct areas: (1) Residential Servicing and Securities and (2) Commercial Real Estate Debt and Other Assets. The Company is organized and conducts its operations to qualify as a real estate investment trust (REIT) for federal income tax purposes. The Company is managed by an affiliate of Fortress Investment Group LLC, a global investment management firm.
Springleaf Finance, Inc., through its subsidiary companies (Springleaf), is a leading provider of consumer credit based in Evansville, Indiana. Springleaf makes secured and unsecured personal loans. In addition to its lending activities, Springleaf offers credit and non-credit insurance through subsidiary insurance companies. Springleaf originates loans through its more than 800 branches located across the U.S. For more information, visit SpringleafFinancial.com.
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