AG Mortgage Investment Trust, Inc. Announces Pricing of Public Offering of Senior Notes

Rhea-AI Summary

AG Mortgage Investment Trust, Inc. (MITT) has announced the pricing of an underwritten public offering of $30 million aggregate principal amount of its 9.500% senior notes due 2029. The offering includes a 30-day option for additional purchase and is expected to close on January 26, 2024. The Company intends to use the net proceeds for general corporate purposes, including acquisition of Residential Investments and Agency RMBS, and working capital. The Notes have received an investment grade rating of BBB- from Egan-Jones Ratings Company.

Insights

Financial Analyst

The announcement by AG Mortgage Investment Trust, Inc. regarding the pricing of a $30 million underwritten public offering of 9.500% senior notes due 2029 carries significant implications for both the company and its investors. The decision to provide a 30-day over-allotment option for an additional $4.5 million suggests a strategy to capitalize on favorable market conditions or potentially to accommodate higher-than-anticipated demand.

The move to list the notes on the NYSE under 'MITN' aligns with typical liquidity enhancement strategies, aiming to provide investors with an accessible secondary market. The investment grade rating of BBB- by Egan-Jones Ratings Company, while being the lowest tier of investment-grade, indicates a moderate credit risk and an adequate capacity for payment of financial commitments, which could influence institutional investor interest.

From a financial strategy perspective, the use of proceeds for general corporate purposes, including the potential repayment of existing indebtedness like the 6.75% Convertible Senior Notes due 2024, suggests a proactive approach to capital structure management. This could be seen as a positive signal to the market about the company's financial prudence and its commitment to maintaining a balanced portfolio of assets and liabilities.

Market Research Analyst

The offering is indicative of the current state of the credit markets and investor appetite for higher-yielding fixed-income securities. The relatively high interest rate of 9.500% reflects both the current interest rate environment and the risk premium demanded by investors for this level of debt. It's noteworthy that the company has secured an investment grade rating, which may attract a broader range of fixed-income investors seeking yield with a moderate risk profile.

The listing on the NYSE could also reflect a strategic move to enhance the visibility and tradability of the notes among a global investor base. This could potentially increase the company's exposure to a more diversified pool of capital, which is particularly important for a REIT given the need for continuous capital for property investments and potential refinancing activities.

Real Estate Investment Trust (REIT) Analyst

AG Mortgage Investment Trust, Inc.'s intended use of the net proceeds to potentially acquire Residential Investments and Agency RMBS is in line with typical REIT investment activities. These investments are critical to generating the income necessary to maintain its REIT status, which requires the distribution of at least 90% of taxable income to shareholders. The strategic move to potentially repay or repurchase a portion of the Convertible Notes due 2024 ahead of maturity may indicate a favorable assessment of the current debt market conditions and an opportunity to optimize the company's debt profile before the expected maturity date.

The company's adherence to the Investment Company Act of 1940 and its qualifications for REIT status are crucial for maintaining certain tax advantages and for investor confidence in the company's compliance with regulatory standards. Investors typically monitor such strategic financial decisions as they can have a direct impact on the trust's performance, dividend payouts and overall financial health.

NEW YORK--(BUSINESS WIRE)-- AG Mortgage Investment Trust, Inc. (NYSE: MITT) (the “Company”) announced today that it has priced an underwritten public offering of $30 million aggregate principal amount of its 9.500% senior notes due 2029 (the “Notes”). The Company has granted the underwriters a 30-day option to purchase up to an additional $4.5 million aggregate principal amount of the Notes to cover over-allotments. The offering is expected to close on January 26, 2024, subject to the satisfaction of customary closing conditions.

The Company intends to apply to list the Notes on the New York Stock Exchange under the symbol “MITN” 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 plans to use the net proceeds from the offering for general corporate purposes, which may include acquisition of Residential Investments and Agency RMBS, subject to the Company’s investment guidelines, and to the extent consistent with maintaining its REIT qualification and exemption from registration under the Investment Company Act of 1940, as amended, and for working capital, which may include, among other things, the repayment of existing indebtedness, including the repurchase or repayment of a portion of the 6.75% Convertible Senior Notes due 2024 (the “Convertible Notes”), which were assumed by a subsidiary of the Company in connection with the Company’s recently completed acquisition of Western Asset Mortgage Capital Corporation. The Convertible Notes can be redeemed at the Company's option on or after June 15, 2024 and mature on September 15, 2024.

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 May 15, 2024. The Notes will mature on February 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 February 15, 2026.

Morgan Stanley & Co. LLC, RBC Capital Markets, LLC, UBS Securities LLC, Keefe, Bruyette & Woods, Inc. and Piper Sandler & Co. are serving as joint book-running managers for the offering.

The offering will be made pursuant to the Company’s currently effective shelf registration statement filed with the Securities and Exchange Commission (the “SEC”).

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, New York, NY 10014
Attn: Prospectus Department
Toll-Free: 1-800-584-6837

RBC Capital Markets, LLC
Brookfield Place, 200 Vesey Street, 8th Floor, New York, NY 10281-8098
Attn: Transaction Management
Telephone: 1-866-375-6829
Email: rbcnyfixedincomeprospectus@rbccm.com

UBS Securities LLC
1285 Avenue of the Americas, New York, NY 10019
Attn: Prospectus Department
Toll-Free: 1-888-827-7275

Keefe, Bruyette & Woods, Inc.
787 Seventh Avenue, 4th Floor, New York, NY 10019
Attn: Capital Markets
Toll-Free: 1-800-966-1559

Piper Sandler & Co.
1251 Avenue of the Americas, 6th Floor, New York, NY 10020
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 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 U.S. mortgage market. AG Mortgage Investment Trust, Inc. is externally managed and advised by AG REIT Management, LLC, a subsidiary of Angelo, Gordon & Co., L.P., a diversified credit and real estate investing platform within TPG.

Additional information can be found on the Company’s website at www.agmit.com.

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 $76 billion across a broad range of credit and real estate strategies. For more information, visit www.angelogordon.com.

*TPG Angelo Gordon’s currently stated assets under management (“AUM”) of approximately $76 billion as of September 30, 2023 reflects fund-level asset-related leverage. Prior to May 15, 2023, TPG Angelo Gordon calculated its AUM as net assets under management excluding leverage, which resulted in TPG Angelo Gordon AUM of approximately $53 billion as of December 31, 2022. The difference reflects a change in TPG Angelo Gordon’s AUM calculation methodology and not any material change to TPG Angelo Gordon’s investment advisory business. For a description of the factors TPG Angelo Gordon considers when calculating AUM, please see the disclosure at www.angelogordon.com/disclaimers/.

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, 2022, the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, the joint proxy statement/prospectus declared effective by the SEC on September 29, 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240123192837/en/

Investors

AG Mortgage Investment Trust, Inc.

Investor Relations

(212) 692-2110

ir@agmit.com

Media

AG Mortgage Investment Trust, Inc.

media@angelogordon.com

Source: AG Mortgage Investment Trust, Inc.

FAQ

What is the purpose of AG Mortgage Investment Trust, Inc.'s (MITT) recent public offering?

The company intends to use the net proceeds for general corporate purposes, including acquisition of Residential Investments and Agency RMBS, and working capital.

What is the interest rate on the senior notes offered by AG Mortgage Investment Trust, Inc. (MITT)?

The senior notes have an interest rate of 9.500% and are due in 2029.

What is the investment grade rating received by AG Mortgage Investment Trust, Inc.'s (MITT) senior notes?

The senior notes have received an investment grade rating of BBB- from Egan-Jones Ratings Company.

What is the ticker symbol for AG Mortgage Investment Trust, Inc.?

The ticker symbol for AG Mortgage Investment Trust, Inc. is MITT.

When is the expected closing date for the offering of senior notes by AG Mortgage Investment Trust, Inc. (MITT)?

The offering is expected to close on January 26, 2024, subject to the satisfaction of customary closing conditions.