RMR Mortgage Trust Announces Full Redemption of Auction Rate Preferred Shares

Rhea-AI Summary

RMR Mortgage Trust (Nasdaq: RMRM) announced the redemption of all its auction rate preferred shares (ARPS), totaling approximately $16.7 million at $25,000 per share, plus accrued dividends. The redemptions will occur between November 2 and November 6, 2020, across five series of ARPS, including Series T and Series W. This move comes as RMRM transitions from a registered investment company to a commercial mortgage real estate investment trust, pending a Deregistration Order from the SEC. Shareholders should be aware of potential delays in redemptions and the transition process.

Positive

• Redeeming all outstanding auction rate preferred shares (ARPS) enhances shareholder value.
• Total redemption value is approximately $16.7 million, signaling strong liquidity.

Negative

• Potential delays in the redemption process due to unforeseen circumstances.
• Transitioning investments to commercial mortgage loans may take longer than expected.

NEWTON, Mass.--(BUSINESS WIRE)--RMR Mortgage Trust (Nasdaq: RMRM) today announced the redemption of all of its issued and outstanding auction rate preferred shares (“ARPS”).

The redemptions announced today represent 100% of RMRM’s ARPS currently outstanding and will be conducted at a liquidation preference of $25,000 per share, for a total liquidation preference of approximately $16.7 million, plus accrued and unpaid dividends thereon to the redemption date, if applicable.

Please see redemption details for RMRM’s respective series of ARPS below:

Series		CUSIP		Redemption Date		Total Shares to be Redeemed		Aggregate Principal Amount to be Redeemed
Series T		74965J403		November 2, 2020		438		$10,950,000
Series W		74965J502		November 3, 2020		47		$1,175,000
Series Th		74965J601		November 4, 2020		91		$2,275,000
Series F		74965J205		November 5, 2020		27		$675,000
Series M		74965J304		November 6, 2020		64		$1,600,000

About RMR Mortgage Trust (Nasdaq: RMRM)

RMRM has historically operated as a closed end investment company advised by RMR Advisors LLC (the “Advisor”). The Advisor is a wholly owned subsidiary of The RMR Group LLC, an alternative asset management company. The RMR Group LLC is the majority owned operating subsidiary of The RMR Group Inc. (Nasdaq: RMR), which is headquartered in Newton, MA. On April 16, 2020, shareholders approved RMRM’s conversion from a registered investment company to a commercial mortgage real estate investment trust and amended RMRM’s fundamental investment policies and restrictions to permit RMRM to pursue its new business. RMRM is in the process of realigning its portfolio so that it is no longer an “investment company” under the Investment Company Act of 1940 (the “1940 Act”) and has applied to the Securities and Exchange Commission (the “SEC”) for an order under the 1940 Act declaring that RMRM has ceased to be a registered investment company (the “Deregistration Order”). RMRM is in the process of selling its existing investments and transitioning its portfolio into commercial mortgage loans. If the SEC issues the Deregistration Order, the Board of Trustees anticipates RMRM would thereafter terminate its existing investment advisory agreement and enter into a new management agreement with its Advisor or an affiliate of the Advisor to provide day-to-day management.

WARNINGS REGARDING FORWARD-LOOKING STATEMENTS

This press release contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. These forward-looking statements are based upon RMRM’s present intent, beliefs and expectations, but forward-looking statements are not guaranteed to occur and may not occur for numerous reasons, some of which are beyond RMRM’s control. For example:

• The process for a Deregistration Order typically takes an extended period to complete, often up to one year or longer. This process may be extended under the current COVID-19 pandemic and resulting economic downturn if it takes longer to complete the submission and for SEC staff to review it considering pressing demands and impacts resulting from the COVID-19 pandemic. Further, the SEC may determine not to grant RMRM the Deregistration Order, which would materially change RMRM’s plans for its business and investments.
• It may take RMRM longer to transition all of its investments to commercial mortgage loans due to COVID-19 and the economic downturn, including determinations to preserve capital, its ability to identify and execute on desirable commercial mortgage loan investments, complying with applicable regulatory, lender and governance requirements, and access to repurchase facility refinancing resources.
• This press release states that RMRM has elected to redeem all of its issued and outstanding auction rate preferred shares and that these redemptions are expected to occur from November 2, 2020, to November 6, 2020. However, the expected redemptions of the auction rate preferred shares may not be completed or could be delayed due to the occurrence of unforeseen or other circumstances.

For these and other reasons, investors should not place undue reliance upon RMRM’s forward-looking statements. Except as required by law, RMRM does not intend to update or change any forward-looking statements as a result of new information, future events or otherwise.