KBRA Affirms Issuer Rating for Rithm Capital Corp.; Maintains Positive Outlook

KBRA affirms the Issuer rating of BB+ for Rithm Capital Corp. (NYSE: RITM; “Rithm” or “the company”), as well as the Issuer rating of BB+ for Newrez LLC (“Newrez”), an indirect, wholly-owned subsidiary of Rithm. The Outlook for the ratings is Positive.

Key Credit Considerations

Rithm’s ratings remain supported by favorable recent period operating performance by the company’s significant mortgage segment, which contributes the majority of consolidated revenues and earnings (~68% of the 2025 pre-tax total), and absorbs more than 50% of the business segment capital allocation. Rithm’s other business segments have also performed well, adding important diversification. In this regard, Sculptor Capital Management’s net AUM flows have been favorable, and Rithm’s Asset Management business segment, which also includes diversified credit manager, Crestline Management, LP, acquired in December 2025 (~$18 billion AUM at acquisition), generated ~$100 million of pre-tax earnings in FY25. Additionally, Genesis Capital, Rithm’s RTL business (acquired in 2021), continues to generate highly profitable growth. Importantly, across these increasingly diverse operating businesses, Rithm reflects seasoned, well-regarded management and operating teams.

Rithm also reflects an enhanced liquidity profile, including maintenance of favorable levels of unrestricted cash and equivalents – firmly in excess of $1 billion at recent quarter-ends – as well as a more durable, primarily secured funding profile focused on term borrowings, with the company’s short-term financing that is subject to daily mark-to-market by lenders utilized only for more liquid collateral. While the company’s reported balance sheet leverage has expanded moderately since the acquisition of Paramount Group, Inc., adjusted for the non-recourse debt that finances the majority of the Office CRE assets, consolidated core leverage remains similar and supportive of ratings. Rithm’s mortgage segment operations, which incorporate a derivative instrument-focused MSR hedging program, benefit the company’s risk management profile, protecting the economics associated with company’s >$10 billion MSR investment through a combination of financial instruments and variable production contribution that is considered advantageous.

Rating Sensitivities

Consistent operating performance, including growing contribution from the Asset Management business segment, could lead to positive rating momentum over the intermediate term. Operating challenges and/or more aggressive capital management could negatively impact the ratings.

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