Nationstar IPO prices well below expected range

Wed Mar 7, 2012 8:17pm EST

(Reuters) - Nationstar Mortgage Holdings (NSM.N) shares priced below the expected range on Wednesday amid a difficult market for IPOs this week.

The residential mortgage loan servicer sold 16.6 million shares at $14 each, raising about $233 million, according to two underwriters.

Owned by hedge fund Fortress Investment Group, Nationstar had filed to sell shares at between $17 and $19 each.

"Investors are not looking at this as part of the sweet spot of the IPO market," said David Menlow, president of IPO Financial. "Anything mortgage related just isn't ringing the bell for investors as they feel that there's more beneath the layer of slime on the housing market."

Nationstar says it has been the fastest-growing mortgage servicer since 2007. As of December 31, 2011, it has serviced more than 645,000 residential mortgage loans worth $106.6 billion.

On Tuesday Nationstar, based in Lewisville, Texas, and affiliate company Newcastle Investment Corp agreed to acquire $63 billion in residential mortgage servicing assets from Lehman Brothers subsidiary Aurora Bank FSB.

In 2011, Nationstar swung to a $20.9 million profit following losses that totaled $530 million over the last four years. Revenue rose 44 percent to $378 million.

Nationstar said it will use the IPO proceeds for working capital and general corporate purposes.

On Tuesday real estate company Select Income REIT (SIR.N) priced shares at $21.50, at the low end of its range.

Drug development company Argos Therapeutics (ARGS.O), which had been scheduled to price shares this week, pulled its IPO citing market conditions.

Underwriters on Nationstar's IPO include Bank of America's (BAC.N) Merrill Lynch, Citigroup Inc(C.N), Credit Suisse (MLPN.P) and Wells Fargo & Co(WFC.N).

The company plans to list on the New York Stock Exchange under the ticker "NSM."

(Reporting by Olivia Oran. Editing by Alwyn Scott and Carol Bishopric)

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