New York Mortgage Trust, Inc. Announces Pricing of Public Offering of Senior Notes

Rhea-AI Summary

New York Mortgage Trust (NYMT) has announced the pricing of a $60 million public offering of 9.125% senior notes due in 2029. Underwriters have a 30-day option to purchase an additional $9 million. The offering is expected to close on June 28, 2024, subject to customary conditions. NYMT plans to list the notes on Nasdaq under the symbol 'NYMTI' within 30 days of issuance. The proceeds will be for general corporate purposes, including acquiring targeted assets. The notes are unsecured and will pay quarterly interest, starting October 1, 2024, maturing on July 1, 2029, with optional redemption starting July 1, 2026.

Positive

• NYMT is raising $60 million, potentially up to $69 million with over-allotments.
• The notes offer a high interest rate of 9.125%, attracting income-focused investors.
• Proceeds will be used for general corporate purposes, potentially fueling growth.

Negative

• The issuance of new senior notes could lead to increased debt obligations.
• The high interest rate of 9.125% indicates a higher cost of borrowing.

Financial Analyst

New York Mortgage Trust, Inc. is raising $60 million through a public offering of senior notes, with a potential additional $9 million. The 9.125% interest rate on these notes is particularly noteworthy, reflecting current market conditions and investor demand for income-producing securities. The high coupon rate, relative to prevailing interest rates, indicates robust investor appetite, but also higher borrowing costs for the company.

Implications for Investors: The issuance of senior notes is a form of debt financing, which can impact the company's leverage and interest coverage ratios. Increased debt can lead to higher financial risk, especially if the proceeds are used for general corporate purposes rather than revenue-generating investments. However, the company's ability to secure financing at a high interest rate suggests confidence in its creditworthiness among institutional investors. Retail investors should monitor how effectively the raised capital is deployed.

Short-Term Impact: The immediate availability of funds can enhance liquidity, supporting operational and strategic initiatives. However, the market may scrutinize the company's debt levels, potentially affecting its stock price in the short term.

Long-Term Impact: The maturity date in 2029 provides a long-term financing horizon, but the company must ensure it generates sufficient cash flows to meet interest obligations and principal repayments. Effective use of the proceeds towards acquiring income-generating assets could mitigate the risk of increased debt load.

NEW YORK, June 25, 2024 (GLOBE NEWSWIRE) -- New York Mortgage Trust, Inc. (Nasdaq: NYMT) (the “Company”) announced today the pricing of an underwritten public offering of $60 million aggregate principal amount of its 9.125% senior notes due 2029 (the “Notes”). The Company has granted the underwriters a 30-day option to purchase up to an additional $9 million aggregate principal amount of the Notes to cover over-allotments. The offering is expected to close on June 28, 2024, subject to the satisfaction of customary closing conditions.

The Company has applied to list the Notes on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “NYMTI” and, if the application is approved, expects trading in the Notes on Nasdaq to begin within 30 days after the Notes are first issued.

The Company intends to use the net proceeds of the offering for general corporate purposes, which may include, among other things, acquiring the Company’s targeted assets, including both single-family and multi-family residential assets, and various other types of mortgage-, residential housing- and credit-related assets that the Company may target from time to time and general working capital purposes.

The Notes will be senior unsecured obligations of the Company and pay interest quarterly in cash on January 1, April 1, July 1 and October 1 of each year, commencing October 1, 2024. The Notes will mature on July 1, 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 July 1, 2026.

Morgan Stanley & Co. LLC, RBC Capital Markets, LLC, UBS Securities LLC, Wells Fargo Securities, LLC, Keefe, Bruyette & Woods, Inc. and Piper Sandler & Co. acted as joint book-running managers of the offering.

The offering was made pursuant to the Company’s existing shelf registration statement, which automatically became effective upon filing with the Securities and Exchange Commission (the “SEC”) on August 6, 2021. The offering of these securities was made only by means of a prospectus and a related prospectus supplement, which will be filed with the SEC. Copies of the prospectus and prospectus supplement related to this offering may be obtained, when available, by contacting:

Morgan Stanley & Co. LLC
180 Varick St., 2nd Floor, New York, New York 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
Email: rbcnyfixedincomeprospectus@rbccm.com
Toll-Free: 1-866-375-6829

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

Wells Fargo Securities, LLC
608 2nd Avenue South, Suite 1000, Minneapolis, MN 55402
Attn: WFS Customer Service
Email: wfscustomerservice@wellsfargo.com
Toll-Free: 1-800-645-3751

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 New York Mortgage Trust, Inc.

New York Mortgage Trust, Inc. is a Maryland corporation that has elected to be taxed as a real estate investment trust (“REIT”) for federal income tax purposes. NYMT is an internally managed REIT in the business of acquiring, investing in, financing and managing primarily mortgage-related single-family and multi-family residential assets.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the safe harbor provisions 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 the Company. No assurance can be given that the offering discussed above will be completed on the terms described or at all, or that the net proceeds of the offering will be used as indicated. Completion of the offering on the terms described 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 the Company. These forward-looking statements are subject to risks and uncertainties, 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 Annual Report on Form 10-K for the year ended December 31, 2023 under “Item 1A. Risk Factors.” Other risks, uncertainties, and factors that could cause actual results to differ materially from those projected may be described from time to time in reports the Company files with the SEC, including reports on Forms 10-Q and 8-K. 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.

For Further Information

AT THE COMPANY        
Investor Relations
Phone: 212-792-0107
Email: InvestorRelations@nymtrust.com

FAQ

What is the total amount NYMT aims to raise in the senior notes offering?

NYMT aims to raise $60 million, with an option for an additional $9 million.

What is the interest rate on the new NYMT senior notes?

The senior notes have an interest rate of 9.125%.

When will the NYMT senior notes offering close?

The offering is expected to close on June 28, 2024.

When do the NYMT senior notes mature?

The senior notes will mature on July 1, 2029.

What will NYMT use the proceeds from the senior notes offering for?

The proceeds will be used for general corporate purposes, including acquiring targeted assets.

When will the NYMT senior notes start trading on Nasdaq?

If approved, the notes are expected to start trading on Nasdaq within 30 days after issuance under the symbol 'NYMTI'.