PennyMac Mortgage Trust Announces $200M Private Placement

Pennymac Mortgage Investment Trust (NYSE: PMT) has announced the pricing of a private placement of $200 million of exchangeable senior notes due 2029 by its indirect wholly-owned subsidiary, Pennymac Corp. The notes will bear interest at a rate of 8.50% per year, payable semiannually, and will be fully and unconditionally guaranteed by PMT.

Upon exchange, Pennymac Corp will pay cash up to the aggregate principal amount of the notes to be exchanged and pay or deliver cash, PMT’s common shares of beneficial interest (“common shares”), or a combination thereof, at Pennymac Corp’s election. The exchange rate will initially equal 63.3332 common shares per $1,000 principal amount of notes, which is equivalent to an initial exchange price of approximately $15.79 per common share. This initial exchange price is approximately 15% above the $13.73 per common share closing price of PMT’s common shares on the New York Stock Exchange on May 21, 2024.

The net proceeds from the offering are intended to be used to fund PMT’s business and investment activities, which may include the acquisition of mortgage servicing rights, government-sponsored enterprise credit risk transfer securities, and other mortgage-related securities, as well as funding PMT’s correspondent lending business and repayment of other indebtedness.

PMT is a mortgage real estate investment trust (REIT) that invests primarily in residential mortgage loans and mortgage-related assets and is externally managed by PNMAC Capital Management, LLC, a wholly-owned subsidiary of Pennymac Financial Services, Inc. (NYSE: PFSI).

The press release also noted that neither the notes nor the common shares issuable upon exchange of the notes will be registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act.

The settlement of the offering is subject to customary closing conditions and is expected to occur on May 24, 2024. Following these announcements, the company's shares moved 1.1%, and are now trading at a price of $13.57. If you want to know more, read the company's complete 8-K report here.

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