Dynex Capital, Inc. Announces Pricing of Public Offering of Common Stock
Dynex Capital (NYSE: DX) announced the pricing of its public offering of 10.5 million shares of common stock, expecting gross proceeds of approximately $126 million. The offering has a 30-day option for underwriters to purchase an additional 1.575 million shares. The offering, managed by BTIG, is set to close on June 7, 2024, subject to customary conditions. Proceeds will be used for acquiring additional investments and general corporate purposes. The offering is made under the company's existing effective shelf registration with the SEC.
- Gross proceeds expected to be approximately $126 million.
- Underwriters granted a 30-day option to purchase up to an additional 1.575 million shares.
- Proceeds to be used for acquiring additional investments and general corporate purposes.
- Offering is made under an effective shelf registration statement with the SEC.
- Potential dilution of existing shareholders due to the issuance of 10.5 million new shares.
- Gross proceeds subject to underwriting discounts and commissions.
- Offering dependent on customary closing conditions, which could introduce uncertainty.
Insights
The announced underwritten public offering of 10,500,000 shares by Dynex Capital, Inc. aims to raise
It’s important to note that the offering is being conducted under an effective shelf registration statement, meaning the company had pre-registered the securities with the SEC. The growth prospects of Dynex Capital rely on its ability to judiciously invest the proceeds in profitable ventures. Investors should keep an eye on how the company allocates these funds and the return on these investments.
A dilution effect and the ability of the company to generate returns from the new investments are critical aspects to monitor. In the current economic climate, raising capital through equity can be a double-edged sword; it provides immediate funds but can affect stock value if perceived as dilutive or if investments do not yield expected returns.
As a Real Estate Investment Trust (REIT), Dynex Capital’s decision to raise funds through a public offering is a strategic move aimed at taking advantage of potential investment opportunities in the real estate market. Given the current interest rate environment and the potential for economic fluctuations, raising capital through equity rather than debt might be seen as a prudent move to maintain a healthy balance sheet.
One key point for investors to consider is the REIT’s commitment to deploying comprehensive risk management and disciplined capital allocation strategies. If Dynex can identify and invest in high-yield real estate assets, the proceeds from the offering could lead to an increase in dividend income, which is a significant attraction for REIT investors. However, the success of this capital raise hinges on the company's ability to effectively execute its investment strategy amidst market volatility.
Investors should watch for updates on how the raised funds are utilized and the subsequent impact on the REIT’s financial performance. The effectiveness of these investments will directly correlate with Dynex Capital’s ability to sustain or increase its dividend payouts, a critical factor for income-focused investors.
BTIG is acting as the sole book-running manager for the offering.
The offering is being made pursuant to the Company’s existing shelf registration statement that has been declared effective by the Securities and Exchange Commission (the “SEC”). The offering of these securities will be made only by means of a prospectus and a related prospectus supplement that should be read prior to investing. Copies of the final prospectus supplement and accompanying prospectus related to the offering may be obtained, when available, by visiting EDGAR on the SEC website at http://www.sec.gov or by contacting BTIG, LLC, 350 Bush Street, 9th FL,
The Company plans to use the net proceeds it receives from the offering to acquire additional investments, consistent with its investment policy, and for general corporate purposes.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities nor will there be any sale of these 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 Dynex Capital
Dynex Capital, Inc. is a financial services company committed to ethical stewardship of stakeholders' capital; employing comprehensive risk management and disciplined capital allocation to generate dividend income and long-term total returns through the diversified financing of real estate assets in
Forward-Looking Statements
This release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements in this press release that are not historical facts, including statements relating to the closing of the offering, the Company’s intended use of proceeds from the offering and other statements that use words such as “expect,” “intend,” “may,” “plan,” “will,” “would,” and similar terms, are “forward-looking statements” that involve risks and uncertainties including, but not limited to, general economic and market conditions. For a discussion of other risks and uncertainties which could cause actual results to differ from those contained in the forward-looking statements, see “Risk Factors” in the Company’s Annual Report on Form 10-K, subsequent Quarterly Report on Form 10-Q and other reports filed with the SEC. The Company cautions readers not to place undue reliance upon any forward-looking statements, which speak only as of the date made. The Company does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in their expectations or any change in events, conditions, or circumstances on which any such statement is based.
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Alison Griffin
(804) 217-5897
Source: Dynex Capital, Inc.
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