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Investing.com -- S&P Global Ratings has revised its outlook on Rithm Capital Corp. to positive from stable, while affirming its ’B’ issuer credit rating and ’B-’ rating on the company’s senior unsecured notes.
The improved outlook reflects Rithm’s increasing scale and business diversity, driven by both organic growth and strategic acquisitions. The company has expanded significantly in recent years, with total assets reaching $47.2 billion and total equity of $8.6 billion as of September 30, 2025, up from $34.6 billion and $7.0 billion, respectively, at the end of 2022.
Rithm has pursued an acquisitive strategy focused on growing its asset management and mortgage banking segments. Recent transactions include the proposed acquisitions of Paramount Group Inc. and Crestline Management L.P., announced in September 2025, following the acquisitions of Sculptor Capital Management in 2023 and Specialized Loan Servicing LLC in 2024.
The company has maintained steady earnings during this growth period, reporting net income of $941 million in 2024, $631 million in 2023, and $983 million in 2022. While most earnings still come from its Newrez mortgage banking platform, about 25% of revenue in the first nine months of 2025 was generated by its investment portfolio, asset management segment, and residential transitional loan portfolio.
S&P expects Rithm’s leverage, measured by debt to adjusted total equity, to remain between 4.5x and 6.0x over the next 12 months. The company’s leverage declined to 5.0x as of September 30, 2025, from 5.5x at the end of 2024, reflecting lower secured debt and higher equity retention.
The rating agency noted that while Rithm’s funding relies on repurchase agreements with daily mark-to-market exposure, margin call risk is partially offset by the high quality of collateral and its hedging program. Most assets funded by these borrowings are agency residential mortgage-backed securities, Treasury securities, and originated agency-qualifying loans.
S&P could raise Rithm’s rating over the next 12 months if it continues to execute its strategy and successfully integrates recent acquisitions while maintaining stable earnings, leverage within expected ranges, and sufficient liquidity without shifting into riskier assets.
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