AG Mortgage Investment Trust, Inc. Announces Closing of Public Offering of $65 Million Senior Notes
AG Mortgage Investment Trust (MITT) has closed a public offering of $65 million in senior notes, due 2029, with an interest rate of 9.500%. The notes are expected to start trading on the NYSE under the symbol 'MITP' on May 20, 2024. This follows a $34.5 million bond offering in January, addressing the maturity of legacy WMC convertible notes due in September. CEO TJ Durkin emphasized the company's focus on proving the sustainability of their portfolio's earnings while optimizing capital structure. The offering was managed by several major financial firms and executed under an effective shelf registration statement with the SEC.
- Successful closing of $65 million senior notes offering.
- High interest rate of 9.500% for the notes.
- Previous $34.5 million bond offering in January.
- Focus on proving portfolio's earnings sustainability.
- Plans to list notes on NYSE under symbol 'MITP' starting May 20, 2024.
- Proactive addressing of upcoming September note maturity.
- High interest rate of 9.500% might indicate higher risk or cost of borrowing.
- Potential dilution of future earnings due to new debt obligations.
- Uncertainty about the market's reception of the new notes until trading begins.
Insights
The completion of AG Mortgage Investment Trust's $65 million senior notes offering at a 9.500% interest rate is a significant event for the company and its investors. This move enhances their liquidity and allows them to address the upcoming maturity of their legacy WMC convertible note. The high interest rate indicates a potentially higher cost of borrowing, yet it also reflects the company's proactive steps to manage its debt profile. Given the economic climate and interest rate trends, such a yield is not uncommon, but it does suggest higher risk tolerance from investors.
From a retail investor's perspective, issuing senior notes means the company is actively seeking to optimize its capital structure. While this can solidify the company's financial footing, the relatively high interest rate might impact net income due to increased interest expenses. On the flip side, the proceeds can be used to generate returns that outpace the borrowing costs, if managed effectively.
Given the company's forward-looking statements on focusing on portfolio sustainability, this could be a positive signal for long-term investors. However, it's essential to keep an eye on the company’s ability to generate sufficient returns to cover the interest expenses and enhance shareholder value.
Listing the senior notes on the NYSE under the symbol 'MITP' adds a layer of transparency and marketability to the debt instruments. This move allows investors to trade the notes more easily, potentially increasing their attractiveness and liquidity. For retail investors, the ability to trade these notes on a major exchange offers a degree of confidence and flexibility in their investment strategy.
Timing the start of trading for May 2024 aligns with a typical post-issuance period for listing and enhances confidence in the management’s execution capabilities. However, investors need to consider market conditions at that time, which can impact the trading performance of these notes.
Overall, this availability on NYSE may encourage investor participation and positively support the company’s efforts to strengthen its capital base. It's notable that such strategic moves indicate a well-thought-out approach to capital markets and investor relations.
“We are extremely pleased to complete this successful follow-on bond offering, which along with our
Mr. Durkin added, “The seamless execution of today’s issuance is a testament to the skills and expertise of our advisors. I would like to take this opportunity to acknowledge the hard work and thank everyone involved.”
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 MITT. Venable LLP acted as
The offering was made pursuant to the Company’s currently effective 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 AG Mortgage Investment Trust, Inc.
AG Mortgage Investment Trust, Inc. is a residential mortgage REIT with a focus on investing in a diversified risk-adjusted portfolio of residential mortgage-related assets in the
Additional information can be found on the Company’s website at www.agmit.com. The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this document.
About TPG Angelo Gordon
Founded in 1988, Angelo, Gordon & Co., L.P. (“TPG Angelo Gordon”) is a diversified credit and real estate investing platform within TPG. The platform currently manages approximately
Forward-Looking Statements
This press release contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intended such statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with the safe harbor provisions. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “will,” “should,” “may,” “projects,” “could,” “estimates” or variations of such words and other similar expressions are intended to identify such forward-looking statements, which generally are not historical in nature, but not all forward-looking statements include such identifying words. Forward-looking statements regarding the Company include, but are not limited to, statements regarding the offering and the intended use of proceeds. These forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. The Company believes these factors include, without limitation, the risk factors contained in the Company’s filings with the SEC, including those described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and in other reports and documents filed by the Company with the SEC from time to time. Copies are available free of charge on the SEC’s website, http://www.sec.gov/. Moreover, other risks and uncertainties of which the Company is not currently aware may also affect the Company’s forward-looking statements and may cause actual results and the timing of events to differ materially from those anticipated. The forward-looking statements made in this press release are made only as of the date of this press release or as of the dates indicated in the forward-looking statements, even if they are subsequently made available by the Company on its websites or otherwise. The Company undertakes no obligation to update or supplement any forward-looking statements to reflect any change in our expectations or any change in events, conditions or circumstances that exist after the date as of which the forward-looking statements were made, except as required by law.
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Investors
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Source: AG Mortgage Investment Trust, Inc.
FAQ
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