Western Asset Mortgage Capital Corporation Announces Pricing of $398.9 Million Residential Whole Loan Securitization

Rhea-AI Summary

Western Asset Mortgage Capital Corporation (NYSE: WMC) announced the pricing of $398.9 million in Mortgage-Backed Notes, Series 2022-1, secured by a portfolio of residential whole loans. The Notes feature a weighted average fixed interest rate of 3.1% and are set to mature in December 2056. This is the company's third securitization of residential loans, aimed at securing long-term financing. The offering is expected to close on February 11, 2022, and will be privately placed with qualified institutional investors. S&P and DBRS are anticipated to rate select class notes as AAA.

Positive

• Successfully priced $398.9 million in Mortgage-Backed Notes, enabling financing for residential whole loans.
• Achieved an attractive fixed interest rate of 3.1%, reflecting favorable market conditions.
• Anticipated AAA ratings for Class A-1A and A-1B Notes from S&P and DBRS, indicating strong credit quality.

Negative

• None.

PASADENA, Calif.--(BUSINESS WIRE)-- Western Asset Mortgage Capital Corporation (NYSE: WMC) (the “Company”) today announced that it has priced an aggregate $398.9 million of Mortgage-Backed Notes, Series 2022-1 (the “Notes”) in a residential mortgage-backed securitization comprised of a portfolio of residential whole loans. The Notes, which initially will be issued by Arroyo Mortgage Trust 2022-1 in five classes, were priced with a weighted average fixed interest rate of approximately 3.1% per annum. All of the Notes are anticipated to have a final payment date in December 2056. The Notes will be issued in a private placement to qualified institutional investors and non-US persons under Regulation S of the Securities Act. It is expected that S&P and DBRS will rate the Notes at closing. The anticipated S&P and DBRS ratings for the Class A-1A Notes and the Class A-1B Notes are AAA(sf) and AAA(sf), respectively. The offering is subject to customary closing conditions and is expected to close on or about February 11, 2022.

“As the Company continues to focus on residential real estate-related investment opportunities, we are pleased to announce the completion of our third securitization of residential whole loan assets. This transaction enables us to finance these assets with longer-term fixed rate financing at attractive levels,” said Bonnie Wongtrakool, Chief Executive Officer of the Company.

The Notes are not registered under the Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. The Notes may only be offered and sold in the United States in accordance with Rule 144A under the Securities Act. This press release does not constitute an offer to sell or the solicitation of any offer to buy nor shall there be any sale of the Notes in any jurisdiction in which such offer, solicitation or sale would be unlawful under the laws of such jurisdiction.

ABOUT WESTERN ASSET MORTGAGE CAPITAL CORPORATION

Western Asset Mortgage Capital Corporation is a real estate investment trust that invests in, acquires and manages a diverse portfolio of assets, with a focus on residential real estate related investments, including non-qualified mortgage loans, non-agency RMBS and other related investments. The Company’s investment strategy may change, subject to the Company’s stated investment guidelines, and is based on its manager Western Asset Management Company, LLC's perspective of which mix of portfolio assets it believes provide the Company with the best risk-reward opportunities at any given time. The Company is externally managed and advised by Western Asset Management Company, LLC, an investment advisor registered with the Securities and Exchange Commission and a wholly-owned subsidiary of Franklin Resources, Inc. Please visit the Company’s website at www.westernassetmcc.com.

FORWARD-LOOKING STATEMENTS

This press release contains statements that constitute “forward-looking statements.” Operating results are subject to numerous conditions, many of which are beyond the control of the Company, including, without limitation, changes in interest rates; changes in the yield curve; changes in prepayment rates; the availability and terms of financing; general economic conditions; market conditions; conditions in the market for mortgage related investments; and legislative and regulatory changes that could adversely affect the business of the Company; and other factors, including those set forth in the Risk Factors section of the Company’s annual report on Form 10-K for the period ended December 31, 2020 and quarterly report on Form 10-Q for the fiscal quarter ended September 30, 2021, respectively, filed with the SEC. The Company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220207005980/en/

Investor Relations Contact:

Larry Clark

Financial Profiles, Inc.

(310) 622-8223

lclark@finprofiles.com

Source: Western Asset Mortgage Capital Corporation

FAQ

What is the total amount of Mortgage-Backed Notes issued by Western Asset Mortgage Capital Corporation?

Western Asset Mortgage Capital Corporation issued a total of $398.9 million in Mortgage-Backed Notes, Series 2022-1.

What interest rate is associated with the newly issued Mortgage-Backed Notes?

The Mortgage-Backed Notes have a weighted average fixed interest rate of approximately 3.1% per annum.

When is the expected closing date for the Mortgage-Backed Notes offering?

The offering is expected to close on or about February 11, 2022.

What are the anticipated ratings for the Mortgage-Backed Notes from S&P and DBRS?

S&P and DBRS are expected to rate the Class A-1A and Class A-1B Notes as AAA.