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PennyMac Mortgage aims to repay debt with recent preferreds issuances
By Devika Patel
Knoxville, Tenn., Sept. 11 – PennyMac Mortgage Investment Trust will use the proceeds from its recent preferred stock sales to repay debt.
“PMT has raised $310 million through two preferred share issuances,” president and chief executive officer David A. Spector said at the Barclays Global Financial Services Conference in New York on Monday.
“The proceeds of these will be the supplement capital being redeployed from the liquidation of distressed loans, while proceeds may also be used to pay down existing indebtedness and repurchase outstanding common shares,” he said.
On March 2, PennyMac priced an upsized $115 million offering of series A fixed-to-floating rate cumulative redeemable preferreds with a greenshoe for an additional $17.25 million and an 8.125% dividend.
The amount was increased from $75 million and the dividend matched price talk that had been set in the 8.125% area.
Morgan Stanley & Co. LLC, Keefe Bruyette & Woods Inc. and RBC Capital Markets were the joint bookrunners.
The dividend will be fixed through March 15, 2024, at which point it will begin floating at Libor plus a spread of 583.1 basis points.
The company can call the preferreds starting on March 15, 2024.
On June 27, PennyMac sold $175 million of 8% series B fixed-to-floating rate cumulative redeemable preferreds with a $26.25 million over-allotment option. Subsequently $20 million of the greenshoe was exercised.
The deal came at the rich end of price talk that had been set at 8% to 8.125%. The amount was increased from $75 million.
Morgan Stanley & Co. LLC, Keefe, Bruyette & Woods Inc. and RBC Capital Markets were the joint bookrunners.
Dividends are payable quarterly.
The dividend will be fixed until June 15, 2024. After that date, the rate will float at Libor plus 599 basis points.
The preferreds become redeemable on June 15, 2024 at par plus accrued dividends.
PennyMac is a Westlake Village, Calif.-based REIT.
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