MFA Financial, Inc. Announces Pricing of Public Offering of Senior Notes
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Insights
The announcement by MFA Financial, Inc. regarding the public offering of senior notes is a strategic move aimed at diversifying the company's capital structure and raising funds for general corporate purposes, including potential repayment of existing debt. With an aggregate principal amount of $75 million and an additional over-allotment option for underwriters, this influx of capital is significant for the firm's liquidity. The fixed 9.000% interest rate on these notes, notably higher than the current average for senior notes, could be indicative of an aggressive attempt to attract investors amidst a competitive fixed-income market.
The BBB- investment grade rating suggests moderate risk and may assure potential investors of the notes' creditworthiness. Such a rating is pivotal as it balances the higher interest offering with the perceived risk of investment. The timing of the offering and the ability for the company to redeem the notes starting three years after issuance provide flexibility for MFA Financial, Inc. to adjust its financial strategies in response to changing market conditions.
Listing the new senior notes on the New York Stock Exchange under the symbol 'MFAO' represents MFA Financial, Inc.'s confidence in their offering's attractiveness and their commitment to ensuring liquidity for investors. The decision to use a shelf registration statement expedites the offering process, which is a common strategy for companies with established market presence to raise funds efficiently. However, investor appetite for such instruments is highly dependent on market conditions and the perceived stability of the issuing company.
The planned use of proceeds for investment in more residential mortgage-related assets suggests a strategic focus on expanding their portfolio in this area. It's important to note that such investments carry inherent risks linked to the property market's volatility, which could affect the company’s financial health should the housing market face headwinds.
The Company intends to apply to list the Notes on the New York Stock Exchange under the symbol “MFAO” and, if the application is approved, expects trading in the Notes on the New York Stock Exchange to begin within 30 days after the Notes are first issued. The Notes have received an investment grade rating of BBB- from Egan-Jones Ratings Company, an independent, unaffiliated rating agency.
The Company intends to use the net proceeds of the offering for general corporate purposes, which may include investing in additional residential mortgage-related assets, including but not limited to, residential whole loans, business purpose loans, MBS and other mortgage-related investments, and for working capital, which may include, among other things, the repayment of existing indebtedness, including amounts outstanding under the Company’s repurchase agreements and the repurchase or repayment of a portion of the Company’s
The Notes will be senior unsecured obligations of the Company, and pay interest quarterly in cash on February 15, May 15, August 15 and November 15 of each year, commencing August 15, 2024. The Notes will mature on August 15, 2029, and may be redeemed, in whole or in part, at any time, or from time to time, at the Company’s option on or after August 15, 2026.
Morgan Stanley & Co. LLC, RBC Capital Markets, LLC, UBS Securities LLC, Wells Fargo Securities, LLC and Piper Sandler & Co. will serve as joint book-running managers for the offering.
The Notes will be offered under the Company’s existing shelf registration statement filed with the Securities and Exchange Commission. The offering of these Notes will be made only by means of a prospectus and a related prospectus supplement, a copy of which may be obtained by contacting:
Morgan Stanley & Co. LLC
180 Varick St., 2nd Floor,
Attn: Prospectus Department
Toll-Free: 1-800-584-6837
RBC Capital Markets, LLC
Brookfield Place
200 Vesey Street, 8th Floor,
Attn: DCM Transaction Management/Scott Primrose
Email: rbcnyfixedincomeprospectus@rbccm.com
Toll-Free: 1-866-375-6829
UBS Securities LLC
1285 Avenue of the
Attn: Prospectus Department
Toll-Free: 1-888-827-7275
Wells Fargo Securities, LLC
608 2nd Avenue South, Suite 1000
Attn: WFS Customer Service
Email: wfscustomerservice@wellsfargo.com
Toll-Free: 1-800-645-3751
Piper Sandler & Co.
1251 Avenue of the
Attn: Debt Capital Markets
Email: fsg-dcm@psc.com
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 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
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. Consummation of the offering and the application of the net proceeds of the offering 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 those described under the heading “Risk Factors” in the prospectus supplement relating to the offering and in the Company’s most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q, 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: Senior Notes
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InvestorRelations@mfafinancial.com
212-207-6488
www.mfafinancial.com
Source: MFA Financial, Inc.
FAQ
What is the principal amount of the senior notes offered by MFA Financial, Inc.?
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What is the intended use of the net proceeds from the offering by MFA Financial, Inc.?
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