Western Asset Mortgage Capital Corporation Declares Second Quarter Dividend of $0.06 Per Share

Rhea-AI Summary

Western Asset Mortgage Capital Corporation (NYSE: WMC) has declared a cash dividend of $0.06 per share for Q2 2021, payable on July 26, 2021 to shareholders on record as of July 2, 2021. The estimated GAAP book value per share as of May 31, 2021 is approximately $3.49, showing a decline from the previous quarter primarily due to a non-performing commercial real estate mezzanine loan of $90 million. The company is negotiating with borrowers regarding debt restructuring, but outcomes remain uncertain.

Positive

• Dividend of $0.06 per share announced for Q2 2021.
• Estimated GAAP book value per share of $3.49 as of May 31, 2021.

Negative

• Decline in book value primarily due to a non-performing $90 million commercial loan.
• Uncertain outcomes regarding debt restructuring negotiations.

Western Asset Mortgage Capital Corporation (the “Company”) (NYSE: WMC) announced today that its Board of Directors has declared a cash dividend of $0.06 per share for the second quarter of 2021. Today’s dividend is payable on July 26, 2021 to common shareholders of record as of July 02, 2021, with an ex-dividend date of June 30, 2021.

In addition, the Company estimates that its GAAP book value per share, as of May 31, 2021, was approximately $3.49. The May 31, 2021 estimated GAAP book value is unaudited, has not been verified or reviewed by any third party and is subject to normal quarterly reconciliation and other procedures. Further, the estimated book value is as of May 31, 2021 and does not include the dividend announced today.

The estimated decline in book value during the first two months of the second quarter of 2021 from the book value reported as of March 31, 2021 in the Company’s Quarterly Report on Form 10-Q was primarily due to a decline in fair value in a commercial real estate mezzanine loan held by the Company with an outstanding balance of $90 million. The underlying property is a class A retail and entertainment complex located in the North East US. The unprecedented global pandemic has adversely impacted the operating performance of this major asset that was scheduled to open in March 2020, but was severely impacted by COVID-19 related shutdowns and restrictions. As previously disclosed, the Company was receiving interest payments on this loan from a reserve that was exhausted in May and the loan became non-performing upon depletion of the reserve.

The Company is currently in discussions with the borrower and other lenders on potential restructuring of the borrower’s debt and there are a number of possible outcomes for this major complex project. There can be no assurance that these discussions will result in a positive outcome for the Company and the Company may suffer further losses with respect to the mezzanine investment.

The rest of the portfolio (excluding the loan discussed above) has generally experienced improved valuations from March 31, 2021 to May 31, 2021.

GAAP book value will fluctuate with market conditions, the results of the Company’s operations and other factors. The Company’s current GAAP book value may be materially different from the May 31, 2021 estimated GAAP book value.

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 consisting of Residential Whole Loans, Commercial Loans, Non-Agency CMBS, Non-Agency RMBS, GSE Risk Transfer Securities and to a lesser extent Agency RMBS, Agency CMBS and ABS. 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 may constitute "forward-looking statements" For these statements, the Company claims the protections of the safe harbor for forward-looking statements contained in such sections. Forward-looking statements are subject to substantial risks and uncertainties, many of which are difficult to predict and are generally beyond the Company’s control. In particular, it is difficult to fully assess the impact of COVID-19 at this time due to, among other factors, uncertainty regarding the severity and duration of the outbreak domestically and internationally and the effectiveness of federal, state and local governments’ efforts to contain the spread of COVID-19 and respond to its direct and indirect impact on the U.S. economy and economic activity. Other factors are described in Risk Factors section of the Company’s annual report on Form 10-K for the period ended December 31, 2020 filed with the Securities and Exchange Commission (“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/20210622005990/en/

FAQ

What is the dividend amount for WMC in Q2 2021?

Western Asset Mortgage Capital Corporation has declared a dividend of $0.06 per share for Q2 2021.

When is the dividend for WMC payable?

The dividend is payable on July 26, 2021.

What is WMC's estimated GAAP book value per share?

The estimated GAAP book value per share as of May 31, 2021 is approximately $3.49.

What are the reasons for WMC's book value decline?

The decline in book value is primarily due to a non-performing commercial loan with an outstanding balance of $90 million.

What is the status of the commercial loan affecting WMC's book value?

The company is currently negotiating debt restructuring with the borrower, but the outcome is uncertain.