Ready Capital Corporation Announces Closing of Public Offering of Senior Notes Due 2029 and Partial Exercise of Over-allotment Option

Rhea-AI Summary

Ready Capital (NYSE: RC) has successfully closed an underwritten public offering of $130 million aggregate principal amount of 9.00% Senior Notes due 2029, which includes $15 million from a partial exercise of the underwriters' over-allotment option. The Notes were issued in denominations of $25.00 and will be listed on the NYSE under the symbol 'RCD' within 30 days of closing.

The company plans to use the net proceeds to originate or acquire target assets aligned with its investment strategy and for general corporate purposes. The offering was managed by Morgan Stanley, Piper Sandler, RBC Capital Markets, UBS Investment Bank, and Wells Fargo Securities as book-running managers.

Positive

• Successfully raised $130 million through senior notes offering
• 9.00% interest rate indicates strong investor demand
• NYSE listing approval for notes under RCD symbol
• Additional $15 million raised through partial over-allotment exercise

Negative

• High 9.00% interest rate represents significant debt servicing cost
• Increased debt burden on company's balance sheet
• Potential dilution of equity value through debt issuance

Insights

Financial Analyst

The $130 million senior notes offering at a 9.00% yield demonstrates Ready Capital's successful capital raising initiative in the current high-rate environment. The strong demand, evidenced by the partial exercise of the over-allotment option for an additional $15 million, signals positive market reception. This fixed-rate debt structure provides predictable financing costs through 2029, though the relatively high 9.00% coupon reflects current market conditions and will impact interest expenses.

The NYSE listing under symbol "RCD" should enhance the notes' liquidity and trading accessibility. The company's strategy to deploy proceeds into target assets aligns with their business model, potentially generating spreads above their cost of capital. However, investors should note that the success of this offering will ultimately depend on management's ability to effectively deploy capital in an increasingly competitive market environment.

Fixed Income Specialist

The 9.00% coupon rate on these senior notes reflects current market dynamics and Ready Capital's credit profile. The retail-friendly $25 denomination structure broadens the investor base and should support secondary market liquidity. The involvement of five major investment banks as book-runners suggests broad institutional distribution and robust syndication capabilities.

The notes' 2029 maturity provides investors with a medium-term fixed income opportunity while giving Ready Capital extended financing visibility. However, the relatively high coupon rate will create a significant fixed cost burden, potentially impacting the company's financial flexibility and profitability metrics. The successful placement and over-allotment exercise indicate strong market acceptance, though investors should monitor the company's ability to generate returns exceeding this cost of capital.

NEW YORK, Dec. 10, 2024 (GLOBE NEWSWIRE) -- Ready Capital Corporation (NYSE: RC) (“Ready Capital” or the “Company”) today announced that it closed an underwritten public offering of $130 million aggregate principal amount of 9.00% Senior Notes due 2029 (the “Notes”), including $15 million aggregate principal amount relating to the partial exercise of the underwriters’ over-allotment option. The Notes were issued in minimum denominations and integral multiples of $25.00. The Company intends to use the net proceeds from this offering to originate or acquire target assets consistent with its investment strategy and for general corporate purposes. Morgan Stanley & Co. LLC, Piper Sandler & Co., RBC Capital Markets, LLC, UBS Investment Bank and Wells Fargo Securities, LLC served as book-running managers for the offering.

The Notes have been approved for listing on the New York Stock Exchange under the symbol “RCD” and trading is expected to commence within 30 days of the closing of the offering.

A registration statement relating to the securities was filed with the Securities and Exchange Commission (the “SEC”) and immediately became effective on March 22, 2022. The offering was made only by means of a prospectus supplement and accompanying prospectus, which have been filed with the SEC. A copy of the prospectus supplement and accompanying prospectus may be obtained free of charge at the SEC’s website at www.sec.gov or from the underwriters by contacting: Morgan Stanley & Co. LLC by calling 1-800-584-6837, Piper Sandler & Co. at 1251 Avenue of the Americas, 6th Floor, New York, NY 10020, or by calling toll-free 866-805-4128, or by email at fsg-dcm@psc.com, RBC Capital Markets, LLC by calling 1-866-375-6829 or by emailing rbcnyfixedincomeprospectus@rbccm.com, UBS Investment Bank by calling 1-888-827-7275, Wells Fargo Securities, LLC by calling 1-800-645-3751 or by emailing wfscustomerservice@wellsfargo.com.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the Company’s securities, nor shall there be any sale of the Company’s securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

About Ready Capital Corporation
Ready Capital Corporation (NYSE: RC) is a multi-strategy real estate finance company that originates, acquires, finances and services lower-to-middle-market investor and owner occupied commercial real estate loans. Ready Capital specializes in loans backed by commercial real estate, including agency multifamily, investor, construction, and bridge as well as U.S. Small Business Administration loans under its Section 7(a) program. Headquartered in New York, New York, Ready Capital employs approximately 350 professionals nationwide. Ready Capital is externally managed and advised by Waterfall Asset Management, LLC.

Forward-Looking Statements
This press release contains certain forward-looking statements. Words such as “believe,” “expect,” “anticipate,” “estimate,” “plan,” “continue,” “intend,” “should,” “could,” “would,” “may,” “potential” or the negative of those terms or other comparable terminology are intended to identify forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions, many of which are beyond the control of the Company, including, without limitation, the risk factors and other matters set forth in the prospectus supplement and the accompanying prospectus and the Company’s Annual Report on Form 10–K for the year ended December 31, 2023 filed with the SEC and in its other filings with the SEC. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.

Contacts:
Investor Relations
Ready Capital Corporation
212-257-4666
InvestorRelations@readycapital.com

FAQ

What is the interest rate and maturity of Ready Capital's (RC) new senior notes?

Ready Capital's new senior notes carry a 9.00% interest rate and mature in 2029.

How much did Ready Capital (RC) raise in their December 2024 senior notes offering?

Ready Capital raised $130 million in total, including $15 million from a partial exercise of the underwriters' over-allotment option.

What is the trading symbol for Ready Capital's (RC) new senior notes?

The new senior notes will trade on the NYSE under the symbol 'RCD' within 30 days of the offering's closing.

How will Ready Capital (RC) use the proceeds from the senior notes offering?

Ready Capital plans to use the proceeds to originate or acquire target assets consistent with their investment strategy and for general corporate purposes.