Rithm Capital Credit Rating Raised to 'B+' by S&P on Successful Diversification

S&P Global Ratings has upgraded Rithm Capital Corp.'s (NYSE: RITM) issuer credit rating to 'B+' from 'B', recognizing the company's successful strategy to diversify its revenue streams beyond its core mortgage operations. The ratings agency also raised its issue rating on Rithm's senior unsecured notes to 'B' from 'B-' and maintained a stable outlook, signaling confidence in the firm's sustained earnings stability and disciplined leverage management.

Key Drivers of the Upgrade

The rating action reflects the significant growth of Rithm's non-mortgage business lines, which include asset management, private credit, and commercial real estate. According to S&P, these segments have become a more substantial part of the company's financial profile.

• As of June 30, 2026, these expanding platforms accounted for approximately 33% of stockholders' equity and total revenue.
• This represents a marked increase from 9% of equity and 13% of revenue at the end of 2022.

A primary catalyst for the upgrade was the rapid scaling of Rithm's asset management arm, which saw assets under management surge to approximately $61 billion by mid-2026, up from $34 billion at the close of 2024. This growth was driven by the acquisition of Crestline and steady organic inflows.

Performance Across Segments

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Despite the strategic pivot, Rithm’s core mortgage finance subsidiary, Newrez, has demonstrated resilient operational performance. Newrez reported $581 million in first-half pretax income, excluding mark-to-market adjustments and hedging, marking a 7% year-over-year increase supported by steady origination and servicing revenue.

This strength helps offset ongoing headwinds in the firm's commercial real estate platform, Elecor. The unit recorded a $69 million pretax loss in the first half of 2026, which S&P attributed to property depreciation and subdued office occupancy in San Francisco. Progress in selling an equity stake in Elecor to third-party investors has also been slower than anticipated.

Financial Health and Outlook

S&P noted that Rithm’s leverage, measured as debt to adjusted total equity, stood at 5.7x at the end of the second quarter, remaining within the company's target range of 4.5x to 6.5x. The modest increase was attributed to higher securitization activity.

The company's rating remains constrained by a funding structure heavily reliant on secured debt, with $34.2 billion in secured financing compared to $1.8 billion in unsecured notes. However, S&P highlighted that roughly half of this secured debt is non-recourse. Rithm maintains an adequate liquidity profile with $1.7 billion in cash and no unsecured debt maturities until 2029.