Impac Mortgage opts to not exchange any cash in offers for preferreds

By Mary-Katherine Stinson

Lexington, Ky., Oct. 13 – Impac Mortgage Holdings, Inc.’s board of directors determined the consideration regarding one part of the exchange offer and consent solicitation for its 9.375% series B cumulative redeemable preferred stock and its 9.125% series C cumulative redeemable preferred stock, according to a press release Thursday.

The company announced it will issue 30 shares of new preferred stock in lieu of cash for each series B preferred stock tendered and one share of new preferred stock in lieu of cash for each series C preferred stock tendered in the exchange offers.

As previously reported, the company originally offered to exchange each outstanding series B preferred for $3 in cash or, under certain conditions, 30 shares of 8.25% series D cumulative redeemable preferreds, and 13.33 shares of common stock.

For each series C preferred, the original offer was $0.10 in cash or, under some conditions, one 8.25% series D cumulative redeemable preferred share, 1.25 shares of common stock and a warrant to purchase 1.5 shares of common stock at a price of $5.00 a share.

The company is also soliciting consents from holders of the series B and C preferreds to amend the provisions of the charter setting forth the terms of the preferreds to permit the closing of the exchange offers without payment of any accrued or accumulated dividends on any outstanding shares of the preferreds and to provide that following the effectiveness of the proposed amendments and the exchange offers the remaining outstanding shares of series B and series C preferreds would be subject to redemption at the election of the company or the holders of any outstanding series B or series C preferred shares for the same consideration as holders of series B and series C preferreds receive in the exchange offers.

As of Sept. 6, holders of 68% of the outstanding series B preferreds and holders of 64.6% of the outstanding series C preferreds had entered into voting agreements agreeing to consent to the proposed amendments.

The exchange offer for each series is also conditioned on the approval by holders of common stock of the proposed amendments and the issuance of shares of common stock in the exchange offers, which, in total, will constitute more than 20% of the outstanding shares of the company’s common stock.

Approval of the amendments and of the issuance of shares of common stock in the exchange offer requires the affirmative vote of a majority of the votes entitled to be cast by holders of the common stock. As of Sept. 6, holders of 47.6% of the outstanding common stock had entered into agreements to vote to approve the proposed amendments and the issuance of common stock in the exchange offers.

The company may complete the exchange offer for either series only if the exchange offer for the other series also meets its minimum condition and the amendments become effective.

The exchange offer expires at 11:59 p.m. ET on Oct. 20.

D.F. King & Co., Inc. (212 269-5550, 888 280-6942 or imh@dfking.com) is the information agent and solicitation agent for the exchange offers and consent solicitation.

Continental Stock Transfer & Trust Co. is the exchange agent.

Impac is an Irvine, Calif., mortgage and warehouse lender.

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