Anworth to price $25 million of perpetual convertible preferreds, talked at dividend of 6.25%

By Kenneth Lim

Boston, Jan. 18 - Anworth Mortgage Asset Corp. plans to price $25 million of perpetual convertible preferred stock at a dividend rate of 6.25% and an initial conversion premium that has not been determined.

The preferreds will be offered at par of $25.

There is an over-allotment option for a further $3.75 million, or 150,000 preferred shares.

Bookrunner Friedman Billings Ramsey declined to comment on the timing and price talk for the registered off-the-shelf offering.

The convertibles may not be mandatorily converted for the first five years, after which the company may force conversion subject to a hurdle at 130% of the conversion price.

There will be dividend protection for quarterly common dividend yields that exceed 6.25% on an annualized basis. There will be takeover protection in the form of a change-of-control put with a make-whole premium.

Anworth, a Santa Monica, Calif.-based real estate investment trust focusing on mortgage-backed securities and residential mortgage loans, said it will use the proceeds of the deal to acquire mortgage-related assets.

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