Newcastle Acquires Interest in Consumer Loan Portfolio from HSBC

NEW YORK--(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.”

About Newcastle

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.

About Springleaf

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.

FORWARD-LOOKING STATEMENTS

Certain statements in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements relating to the offering and intended use of proceeds. These statements are based on management’s current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements, many of which are beyond our control. The Company can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from the Company’s expectations include, but are not limited to, the risk that market conditions cause downgrades of a significant number of our securities or the recording of additional impairment charges or reductions in shareholders’ equity; the risk that we can find additional suitably priced investments; the risk that investments made or committed to be made cannot be financed on the basis and for the term at which we expect; the relationship between yields on assets which are paid off and yields on assets in which such monies can be reinvested; actual recapture rates with respect to any excess mortgage servicing rights investment; and the relative spreads between the yield on the assets we invest in and the cost and availability of debt and equity financing. Accordingly, you should not place undue reliance on any forward-looking statements contained in this press release. For a discussion of some of the risks and important factors that could affect such forward-looking statements, see the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operation” in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as filed with the Securities and Exchange Commission. In addition, new risks and uncertainties emerge from time to time, and it is not possible for the Company to predict or assess the impact of every factor that may cause its actual results to differ from those contained in any forward-looking statements. Such forward-looking statements speak only as of the date of this press release. The Company expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with regard thereto or change in events, conditions or circumstances on which any statement is based.

Newcastle Investment Corp.
Investor Relations, 212-479-3195

Source: Newcastle Investment Corp.