Chimera Investment Corporation Announces Closing of Public Offering of $74.75 Million Senior Notes

Rhea-AI Summary

Chimera Investment (NYSE: CIM) has successfully closed its public offering of $74.75 million in 9.250% senior notes due 2029. This includes $9.75 million issued through an over-allotment option. The notes, trading under the symbol 'CIMO', are expected to begin trading on the New York Stock Exchange on August 22, 2024. Egan-Jones Ratings Company has assigned an investment grade rating of BBB to the notes.

CEO Phillip J. Kardis II highlighted that this is Chimera's second bond offering in 2024, bringing their total unsecured debt raise for the year to $140 million. The company believes this capital raising activity will benefit shareholders in the long term. Several prominent financial institutions served as joint book-running managers for the offering.

Positive

• Successful closing of $74.75 million senior notes offering
• Investment grade rating of BBB from Egan-Jones Ratings Company
• Total unsecured debt raise for 2024 reaches $140 million
• Notes to be listed on NYSE, potentially increasing liquidity

Negative

• Increased debt load may impact financial flexibility
• 9.250% interest rate on notes may increase interest expenses

Insights

Financial Analyst

Chimera Investment 's successful closing of a $74.75 million senior notes offering is a significant development for the company's financial strategy. The 9.250% yield and BBB investment-grade rating indicate a balance between attracting investors and managing borrowing costs. This brings their total unsecured debt raise for 2024 to $140 million, showcasing strong market confidence.

The NYSE listing of these notes (symbol: CIMO) could enhance liquidity and attract a broader investor base. However, investors should consider the impact on the company's debt-to-equity ratio and interest expenses. While this capital raise may fuel growth opportunities, it's important to monitor how effectively Chimera deploys these funds to generate returns that outpace the 9.250% interest rate.

Market Research Analyst

The successful completion of this offering, especially with the full exercise of the over-allotment option, signals strong investor appetite for Chimera's debt securities. This positive reception could potentially pave the way for future capital raises, providing Chimera with financial flexibility to capitalize on market opportunities in the mortgage-backed securities sector.

The 9.250% yield is relatively high in the current market, which may attract yield-seeking investors but also reflects the perceived risk associated with the company's business model. The investment-grade rating from Egan-Jones, while positive, should be viewed in context as ratings from larger agencies like Moody's or S&P could provide additional credibility. Investors should closely watch how this capital injection impacts Chimera's investment strategy and portfolio composition in the coming quarters.

NEW YORK--(BUSINESS WIRE)-- Chimera Investment Corporation (NYSE: CIM) (the “Company”) announced today that it has closed its previously announced underwritten public offering of $74.75 million aggregate principal amount (including $9.75 million issued pursuant to the over-allotment option) of its 9.250% senior notes due 2029 (the “Notes”). The Company has been authorized to list the Notes on the New York Stock Exchange under the symbol “CIMO” and expects trading in the Notes on the New York Stock Exchange to begin on August 22, 2024. The Notes have received an investment grade rating of BBB from Egan-Jones Ratings Company, an independent, unaffiliated rating agency.

“Today’s bond offering, our second for 2024, brings our total unsecured debt raise for the year to $140 million,” said Phillip J. Kardis II, President and CEO. “We believe the ability to grow our business through successful capital raising activities will benefit our shareholders over the long-term.”

Morgan Stanley & Co. LLC, RBC Capital Markets, LLC, UBS Securities LLC, Wells Fargo Securities, LLC, Keefe, Bruyette & Woods, Inc., and Piper Sandler & Co. served as joint book-running managers for the offering. Hunton Andrews Kurth LLP acted as legal advisor to the Company. Venable LLP acted as Maryland counsel to the Company. Ropes & Gray LLP acted as legal advisor to the joint book-running managers.

The Notes were offered under the Company’s existing shelf registration statement filed with the Securities and Exchange Commission (the “SEC”).

This press release shall not constitute an offer to sell or the solicitation of an offer to buy the Notes or any other securities, nor shall there be any sale of such Notes or any other securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.

About Chimera Investment Corporation

Chimera is a publicly traded real estate investment trust, or REIT, that is primarily engaged in the business of investing directly or indirectly through its subsidiaries, on a leveraged basis, in a diversified portfolio of mortgage assets, including residential mortgage loans, Agency RMBS, Non-Agency RMBS, Agency CMBS, and other real estate related securities.

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding the offering and the intended use of proceeds. Actual results may differ from expectations, estimates and projections and, consequently, readers should not rely on these forward-looking statements as predictions of future events. Words such as “expect,” “target,” “assume,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believe,” “predicts,” “potential,” “continue,” and similar expressions are intended to identify such forward-looking statements. These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from expected results, including, among other things, those described in our most recent Annual Report on Form 10-K, and any subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, under the caption “Risk Factors.” Factors that could cause actual results to differ include, but are not limited to: our business and investment strategy; our ability to accurately forecast the payment of future dividends on our common and preferred stock, and the amount of such dividends; our ability to determine accurately the fair market value of our assets; availability of investment opportunities in real estate-related and other securities, including our valuation of potential opportunities that may arise as a result of current and future market dislocations; our expected investments; changes in the value of our investments, including negative changes resulting in margin calls related to the financing of our assets; changes in inflation, interest rates and mortgage prepayment rates; prepayments of the mortgage and other loans underlying our mortgage-backed securities, or MBS, or other asset-backed securities, or ABS; rates of default, forbearance, deferred payments, delinquencies or decreased recovery rates on our investments; general volatility of the securities markets in which we invest; our ability to maintain existing financing arrangements and our ability to obtain future financing arrangements; our ability to effect our strategy to securitize residential mortgage loans; interest rate mismatches between our investments and our borrowings used to finance such purchases; effects of interest rate caps on our adjustable-rate investments; the degree to which our hedging strategies may or may not protect us from interest rate volatility; the impact of and changes to various government programs; impact of and changes in governmental regulations, tax law and rates, accounting guidance, and similar matters; market trends in our industry, interest rates, the debt securities markets or the general economy; estimates relating to our ability to make distributions to our stockholders in the future; our understanding of our competition; our ability to find and retain qualified personnel; our ability to maintain our classification as a real estate investment trust, or, REIT, for U.S. federal income tax purposes; our ability to maintain our exemption from registration under the Investment Company Act of 1940, as amended, or 1940 Act; our expectations regarding materiality or significance; and the effectiveness of our disclosure controls and procedures.

Readers are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. We do not undertake or accept any obligation to release publicly any updates or revisions to any forward-looking statement to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based. Additional information concerning these, and other risk factors is contained in our most recent filings with the SEC. All subsequent written and oral forward-looking statements concerning the Company or matters attributable to the Company or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above.

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Chimera Investment Corporation

Investor Relations

Tel: 888-895-6557

Source: Chimera Investment Corporation

FAQ

What is the size and terms of Chimera Investment 's (CIM) recent senior notes offering?

Chimera Investment (CIM) closed a public offering of $74.75 million aggregate principal amount of 9.250% senior notes due 2029. This includes $9.75 million issued through an over-allotment option.

When will Chimera Investment 's (CIM) new senior notes begin trading on the NYSE?

The senior notes, trading under the symbol 'CIMO', are expected to begin trading on the New York Stock Exchange on August 22, 2024.

What rating did Chimera Investment 's (CIM) new senior notes receive?

The senior notes received an investment grade rating of BBB from Egan-Jones Ratings Company, an independent, unaffiliated rating agency.

How much has Chimera Investment (CIM) raised in unsecured debt for 2024?

According to CEO Phillip J. Kardis II, this offering brings Chimera Investment 's total unsecured debt raise for 2024 to $140 million.