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Home Loan Servicing Solutions, Ltd. Reports EPS of $0.37 and Net Income of $6.6 Million in the Third Quarter of 2012

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  • Earned $6.6 million, or $0.37 per ordinary share.
  • Declared dividends of $0.10 per share per month totaling $5.9 million for the quarter.
  • Received gross proceeds of $249.9 million in connection with the follow-on offering of 16,387,500 shares at $15.25 per ordinary share on September 12, 2012. Proceeds from the offering were used to acquire mortgage servicing assets related to non-agency mortgage loans from Ocwen with an unpaid principle balance ("UPB") of $27.8 billion in September.
  • In addition, completed the flow acquisition of mortgage servicing assets related to non-agency mortgage loans with UPB of $2.1 billion from Ocwen on August 1, 2012 resulting in ending UPB of $46.5 billion.
  • In connection with the acquisition of mortgage servicing assets in September, executed swap of variable rate LIBOR for a fixed rate of 52 basis points covering the projected interest exposure for existing and newly acquired assets for a term of 60 months.
  • Earnings include a $0.03 per share benefit from reduced amortization due to the deferral of certain modifications as Ocwen tested delinquent loans for HAMP 2 eligibility, and ending the quarter on a Sunday delayed the receipt of certain loan payoffs. These factors combined to reduce the annualized prepayment rate to 12.6% from 15.2% in the second quarter.  There was no change in servicing asset valuations.
  • On October 1, 2012, the Company's Board of Directors declared a monthly dividend of $0.11 per ordinary share with respect to each of October, November and December 2012.
  • On October 17, 2012, completed the issuance of $250 million of one-year and $450 million of three-year term notes secured by servicing advance receivables at a weighted average interest spread over LIBOR of 1.55%. The proceeds were used to repay $600 million in term notes and to reduce borrowing on variable funding notes with a weighted average interest spread of 2.93%.

Published October 18, 2012

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