Chimera Investment Corporation Announces Closing of Public Offering of $65 Million Senior Notes
Chimera Investment (NYSE: CIM) announced the closing of its public offering of $65 million in 9.000% senior notes due 2029. The notes are expected to trade on the NYSE under the symbol 'CIMN' starting May 28, 2024, and received a BBB investment grade rating from Egan-Jones. The offering aims to diversify Chimera's capital structure and support the acquisition of high-yielding assets. The transaction was managed by prominent financial firms including Morgan Stanley and RBC Capital Markets. Legal advisors included Hunton Andrews Kurth LLP and Venable LLP.
- Closed a $65 million public offering of 9.000% senior notes due 2029.
- Notes received a BBB investment grade rating from Egan-Jones.
- Expected trading of notes on NYSE under symbol 'CIMN' starting May 28, 2024.
- Diversifies capital structure.
- Supports acquisition of high-yielding assets, potentially benefiting shareholders.
- No immediate impact on revenue or earnings disclosed.
- Potential shareholder dilution if future offerings occur.
- Interest expense from 9.000% notes will increase financial liabilities.
Insights
The closing of a
The 9.000% interest rate is relatively high which indicates that the company might be paying a premium to attract investors. This may be due to the current economic conditions or investor's perception of risk associated with CIM. The investment-grade rating of BBB from Egan-Jones Ratings Company is a positive note, but it's important to observe how the market reacts once trading begins.
For retail investors, this could potentially be a beneficial opportunity, especially if the company uses these funds to acquire high-yielding assets as mentioned by its CEO. However, it's important to monitor how effectively the company deploys these funds and the interest expenses associated with the notes. The long-term benefits will largely depend on how well these investments perform.
The legal implications of closing a public offering and listing the notes on the NYSE are important to consider. The company has followed standard procedures, including filing a shelf registration statement with the SEC. This ensures compliance with securities law and provides greater transparency to investors.
Furthermore, the involvement of multiple legal advisors such as Hunton Andrews Kurth LLP and Venable LLP underscores the complexity and significance of this transaction. These firms likely provided counsel on regulatory compliance, which is important for mitigating legal risks associated with public offerings.
Retail investors should take comfort in the fact that well-regarded legal advisors have overseen the process, ensuring that the offering complies with regulatory requirements. However, they should still be vigilant about any future legal or regulatory issues that could affect the company's financial health and, consequently, the value of the notes.
“Chimera is pleased to announce the closing of the Notes offering,” said Phillip J. Kardis, Chimera’s President and CEO. “This offering diversifies our capital structure and allows us to continue acquiring high yielding assets which we believe will benefit our shareholders over the long term. We would like to thank the entire team who advised us on this transaction.”
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
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 REIT for
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
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