PennyMac Mortgage plans $200 million seven-year exchangeables to yield 5.25%-5.75%, up 20%-25%

By Rebecca Melvin

New York, April 23 - PennyMac Mortgage Investment Trust launched an offering of $200 million of seven-year exchangeable senior notes after the market close Tuesday, which was seen pricing after the market close Wednesday.

The securities were talked to yield 5.25% to 5.75% with an initial conversion premium of 20% to 25%, according to market sources.

The Rule 144A offering has a $30 million greenshoe. Credit Suisse Securities (USA) LLC, BofA Merrill Lynch and Citigroup Global Markets Inc. are the joint bookrunners.

The exchangeables are non-callable. There is standard takeover protection, and dividend protection, in the form of a conversion rate adjustment for dividends paid above $0.57 quarterly.

Proceeds are expected to be used to acquire distressed mortgage loans, to develop correspondent lending business, to repay debt and for general corporate purposes.

Calabasas, Calif.-based PennyMac is a real estate investment trust.

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