PennyMac talks $200 million five-year exchangeable notes to yield 5.25%-5.75%, up 12.5%-17.5%

By Abigail W. Adams

Portland, Me., March 1 – PennyMac Corp. plans to price $200 million of five-year notes exchangeable for PennyMac Mortgage Investment Trust stock after the market close on Tuesday with price talk for a coupon of 5.25% to 5.75% and an initial exchange premium of 12.5% to 17.5%, according to a market source.

Credit Suisse Securities (USA) LLC, BofA Securities Inc., Barclays, Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC are joint bookrunners for the Rule 144A offering, which carries a greenshoe of $30 million.

The notes are non-callable.

There is takeover protection and dividend protection above a quarterly dividend of 47 cents.

The notes will be settled in cash, shares or a combination of both.

Proceeds will be used for general corporate purposes, which may include the repayment of debt and the investment in mortgage servicing rights.

PennyMac is a Westlake Village, Calif.-based mortgage real estate investment trust.

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