Mr. Cooper's subsidiary Nationstar Mortgage Holdings priced $1 billion of senior notes at 7.125%, due on Feb. 1, 2032. Interest will be paid every six months, starting on Aug. 1.

Net proceeds are expected to repay a portion of the outstanding debt amounts under Mr. Cooper's MSR facilities.

By doing this, the company should end up with "modest savings versus using bilateral MSR notes which carry a cost of funds around 300-to-350 basis points over SOFR," Hagen wrote.

"Paying down the secured lines doesn't preclude Mr. Cooper from drawing on the debt again in the future, although most of the facilities don't go beyond 2025, and so the liquidity runway looks much more balanced in using unsecured for now," he continued. "Pro-forma on the secured side, we're looking for it to have around $1.2 billion of drawn MSR funding, $500 million in MSR advances, and $500 million in unrestricted cash."

And Mr. Cooper has more room to add debt to its balance sheet in the future, Hagen said.

Whether or not it does depends on how its mortgage servicing portfolio's complexion changes if or when the Fed cuts short-term rates, because it still has prepayment and recapture sensitivity if a sharp interest rate rally occurs, he explained.

Most of Mr. Cooper's portfolio additions have come from bulk purchases of lower-coupon mortgages, including the servicing rights picked up from Home Point, "where we see room for more mixed recapture results versus loans and MSRs acquired in the flow or co-issue channel," Hagen said.

Meanwhile, those preliminary results, released in a Securities and Exchange Commission filing, do not include the impact of $27 million of one-time charges related to the company's recent cybersecurity incident, said Bose George, an analyst at Keefe, Bruyette & Woods, in a research note from Monday.

Those results do beat George's estimate of $102 million (including those charges) for Mr. Cooper.

Its mortgage servicing rights portfolio grew to $992 billion, a 14% year-over-year gain, beating George's estimate of 11%. At the end of the current quarter, Mr. Cooper expects to have $1.1 trillion in MSRs, the filing declared.

However, it will be taking a mark-to-market loss on the MSRs of $41 million, net of any hedging gains. That implies a realized hedge ratio of 81%. The servicing markdown is likely a result of mortgage rates falling from their peak at the end of October, which would encourage holders of recently originated mortgages to refinance.

The servicing segment reported pretax operating income of $229 million. Take out the mark-to-market and other items, it had pretax income of $184 million.

Minus the mark-to-market, the cybersecurity incident costs and $8 million of costs related to its acquisitions of Roosevelt and Home Point, Mr. Cooper had pretax income in the fourth quarter of $69 million, an improvement over the $10 million loss one year prior.

In the fourth quarter, the originations segment reported pretax income of $10 million.

During the period, Mr. Cooper's funded origination volume was $2.7 billion, compared with $3.4 billion in the third quarter and $3.2 billion for the fourth quarter in 2022, Hagen said.

The company will be announcing earnings on Feb. 9.