By Rebecca Melvin
New York, Aug. 20 – Western Asset Mortgage Capital Corp. priced $40 million of 6.75% convertible senior notes due Oct. 1, 2022 in a reopening of an existing $115 million of notes priced in October. 2017, the company said Tuesday in a news release. The new notes will form one series with the existing notes for a new deal size of $155 million.
The new notes were sold at an initial conversion premium of 24%.
The initial conversion rate is 83.1947 shares per each $1,000 of notes, equal to an initial conversion price of $12.02 a share.
JMP Securities is the bookrunner for the deal that was made under an effective registration statement filed by the company with the Securities and Exchange Commission.
Conversions will be settled in cash, common stock, or both, at the company’s option. The notes are contingently convertible prior to July 1, 2022. The company can redeem the issue on or after July 1, 2022.
The company plans to use proceeds from the offering primarily for general corporate purposes, including to opportunistically invest in credit sensitive investments consisting of residential whole loans, commercial loans, non-agency CMBS and non-agency RMBS. The exact investments will depend on prevailing market and investment conditions at the time its manager Western Asset Management Co., LLC invests the net proceeds.
Western Asset is a Pasadena, Calif.-based real estate investment trust.
| Issuer: | Western Asset Mortgage Capital Corp.
|
| Securities: | Convertible senior notes
|
| Amount: | $40 million
|
| Maturity: | Oct. 1, 2022
|
| Bookrunner: | JMP Securities
|
| Coupon: | 6.75%
|
| Initial conversion premium: | 24%
|
| Initial conversion price: | $12.02 a share
|
| Initial conversion rate: | 83.1947 shares
|
| Call options: | On or after July 1, 2022
|
| Contingent conversion: | Yes, prior to July 1, 2022
|
| Net share settlement: | Yes
|
| Pricing date: | Aug. 19
|
| Settlement date: | Aug. 22
|
| Stock symbol: | NYSE: WMC
|
| Stock reference price: | $9.70 as of Aug. 19 close
|
| Market capitalization: | $516.27 million
|
| Distribution: | Registered, off the shelf
|
| Total deal size: | $155 million
|
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