Two Harbors greenshoe increases 6.25% convertibles to $287.5 million

By Wendy Van Sickle

Columbus, Ohio, Jan. 19 – The underwriter of Two Harbors Investment Corp.’s 6.25% convertible senior notes due 2022 fully exercised the $37.5 million over-allotment option, lifting the total deal size to $287.5 million, according to a press release.

As previously reported, the company priced $250 million of the notes at par to yield 6.25% with an initial conversion premium of 13.5% on Jan. 13.

The conversion price is $10.00 per share, representing a conversion rate of 100 shares per each $1,000 of notes.

The yield came at the cheap end of the 6% to 6.25% yield talk and on top of the premium talk.

Credit Suisse Securities (USA) LLC is the bookrunner.

There are standard change of control, anti-dilution and dividend protections, the source noted. The issue cannot be redeemed prior to maturity, but holders can require a repurchase in certain circumstances.

Conversions will be settled with common stock.

Proceeds will be used to fund the business and investment activities of the company and its subsidiaries, which may include acquisitions, and for general corporate purposes.

Two Harbors is a New York-based real estate investment trust that invests in residential mortgage-backed securities, mortgage servicing rights, commercial real estate and other financial assets.

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