Thornburg Mortgage to price $112.5 million add-on of convertible preferreds on Monday

By Rebecca Melvin

New York, Jan. 9 - Thornburg Mortgage Inc. plans to price a $112.5 million offering of convertible preferred shares on Monday after the close, a syndicate source said.

The add-on marks a reopening of the company's existing issue of 10% preferreds priced last August, the source said.

Concurrently with the preferred offering, the company is pricing a public offering of common stock.

The two issues will raise approximately $200 million in additional long-term capital. A 15% over-allotment option for each offering will be granted to the underwriters.

Friedman Billings Ramsey and UBS Investment Bank are joint bookrunners of the additional 4.5 million shares of the company's existing 10% series F cumulative convertible redeemable preferred stock.

Last August, Thornburg priced $500 million in series F cumulative convertible redeemable preferred stock, with a base dividend rate of 10% or the dividend yield on Thornburg common stock and an initial conversion premium of 3%. The conversion price is $11.50, or 2.1739 shares per preferred share.

Thornburg stock closed at $8.78 Wednesday.

Proceeds will be used to buy additional adjustable-rate mortgage assets and for liquidity and general corporate purposes.

Thornburg is a Santa Fe, N.M.-based mortgage lender specializing in jumbo mortgages.

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