MFA Financial, Inc. Announces New Stock Repurchase and ATM Programs
- None.
- None.
Insights
The announcement of a new $200 million stock repurchase program by MFA Financial, Inc. indicates a strategic move to manage capital allocation and potentially signal confidence in the company's intrinsic value. Share buybacks can be accretive to earnings per share (EPS) by reducing the number of outstanding shares, which may lead to a higher stock price if market conditions are favorable. The repurchase program's flexibility, without a minimum share requirement, allows MFA to react dynamically to market fluctuations.
However, investors should consider the opportunity cost of such a program. The funds allocated for stock repurchases could alternatively be used for investment in growth opportunities or debt reduction. The balance between returning capital to shareholders and investing in the company's future is a critical consideration for long-term value creation.
The timing of this new stock repurchase program, following the expiration of the previous program with a substantial portion of the authorization remaining unused, may reflect changes in market conditions or shifts in the company's strategic priorities. It's noteworthy that the authorization extends through the end of 2025, providing a long-term horizon for capital management decisions.
Additionally, the concurrent announcement of an 'at the market' (ATM) stock offering program for up to $300 million adds another layer of strategic financial maneuvering. This ATM offering could be used to raise capital efficiently, with the flexibility to adjust the timing and size of the offering based on market conditions and capital needs. It's a tool that can balance liquidity and financing needs against shareholder dilution concerns.
The use of Rule 10b5-1 plans is a significant aspect of the stock repurchase program. These plans allow companies to buy back shares at predetermined times and prices, which can mitigate concerns about insider trading by providing a legal safe harbor for stock repurchases. This is particularly important as it allows MFA Financial to conduct repurchases without the risk of appearing to trade on material non-public information.
Securities laws and regulatory requirements are central to the execution of stock repurchase and ATM offering programs. Compliance with these laws ensures that the transactions are conducted fairly and transparently, maintaining market integrity and shareholder trust.
The new stock repurchase program does not require the purchase of any minimum number of shares. The timing and extent to which MFA repurchases its shares will depend upon, among other things, market conditions, share price, liquidity, regulatory requirements and other factors, and repurchases may be commenced or suspended at any time without prior notice. Acquisitions under the stock repurchase program may be made in the open market, through privately negotiated transactions or block trades or other means, in accordance with applicable securities laws (including, in MFA’s discretion, through the use of one or more plans adopted under Rule 10b5-1 promulgated under the Securities Exchange Act of 1934, as amended).
The Company also filed a Form 8-K with the SEC today relating to a new “at the market” (“ATM”) stock offering program for the offering and sale by the Company from time to time of shares of the Company’s common stock having an aggregate offering price of up to
“The Board’s authorization of new ATM and stock repurchase programs will provide MFA with the flexibility to act efficiently in a range of potential capital markets conditions,” commented Michael Roper, MFA’s Senior Vice President and Chief Financial Officer.
About MFA Financial, Inc.
MFA Financial, Inc. is a leading specialty finance company that invests in residential mortgage loans, residential mortgage-backed securities and other real estate assets. Through its wholly owned subsidiary, Lima One Capital, MFA also originates and services business purpose loans for real estate investors. MFA has distributed over
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Forward-looking statements involve numerous risks and uncertainties. The Company’s actual results may differ from the Company’s beliefs, expectations, estimates and projections and, consequently, you should not rely on these forward-looking statements as predictions of future events. Forward-looking statements are not historical in nature and can be identified by words such as “anticipate,” “estimate,” “will,” “should,” “expect,” “believe,” “intend,” “seek,” “plan” and similar expressions or their negative forms, or by references to strategy, plans, or intentions. Forward-looking statements are based on the Company’s beliefs, assumptions and expectations of the Company’s future performance, taking into account information currently available to it. No assurance can be given that the offering discussed above will be consummated, or that the net proceeds of the offering will be used as indicated. Capital markets activities are subject to numerous possible events, factors and conditions, many of which are beyond the control of the Company and not all of which are known to it, including, without limitation, market conditions and other risks, uncertainties and factors identified in the Company’s most recent Annual Report on Form 10-K and any subsequent filings, which can be accessed at the Securities and Exchange Commission’s website at www.sec.gov. All forward-looking statements speak only as of the date on which they are made. New risks and uncertainties arise over time, and it is not possible to predict those events or how they may affect the Company. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.
Category: Stock Repurchase.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240229843568/en/
InvestorRelations@mfafinancial.com
212-207-6488
www.mfafinancial.com
Source: MFA Financial, Inc.
FAQ
What did MFA Financial, Inc. (MFA) announce recently?
When will the new stock repurchase program be in effect until?
What was the value of the prior stock repurchase program?
What does the new stock repurchase program supersede?
Who commented on the Board's authorization of new programs?
