Five Oaks greenshoe exercised, lifts preferred sale by $2.25 million

By Tali Rackner

Norfolk, Va., May 27 - Underwriters for Five Oaks Investment Corp.'s 8.75% series A cumulative redeemable preferred stock exercised their over-allotment option in full, adding an additional $2.25 million, or 90,000 shares, according to an 8-K filing with the Securities and Exchange Commission.

The company priced $15 million, or 600,000 shares, of the preferreds in the May 21 reopening.

As previously reported, the company originally priced $20 million of the preferreds on Dec. 18, and a $3 million over-allotment option was exercised in January. Including the latest greenshoe, the total issue size is now $40.25 million.

Keefe, Bruyette & Woods, Inc. is the bookrunner.

The dividend rate is fixed up to but excluding Dec. 27, 2018, at which time it will begin to float at Libor plus 715.1 basis points. Should the company fail to make any six dividend payments, the dividend will increase by 200 bps.

The preferreds are redeemable on or after Dec. 23, 2018. They are redeemable prior to that time only to maintain the company's real estate investment trust status, for tax purposes or upon a change of control.

The company plans to use the proceeds to purchase legacy non-agency residential mortgage-backed securities, non-agency mortgage assets, multi-family mortgage-backed securities and, to a lesser extent, agency residential mortgage-backed securities.

Five Oaks is a New York City-based REIT focused on investing, financing and managing a portfolio of residential mortgage-backed securities and mortgage-backed securities.

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