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For Mortgage REITs, Secondary Offerings a Bit Light in Price

FEB 22, 2012 1:24pm ET
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A pair of mortgage real estate investment trusts each priced their public offerings Wednesday morning – but at prices below their Tuesday night close.

NorthStar Realty Finance is selling 15 million shares -- with an over-allotment option of 2.25 million shares -- at $5.55 a piece. On Tuesday, it closed at $5.78. In afternoon trading its price rose to just $5.42.

Until last Thursday, NorthStar had been trading under that $5.55 per share price. But on that day, its stock rallied $0.41 to close at $5.67.

Last Friday, NorthStar posted a $83 million loss in the fourth quarter, which included a $116 million hit on the fair market value of its investments. For the full year, the company originated $300 million of commercial real estate  loans.

Separately, Two Harbors Investment Corp. priced a 30 million share offering -- with a 4.5 million over-allotment option -- at $9.90 per unit. On Tuesday it closed at $10.23. At noon today, it was trading at $9.93.

It was the second stock offering from Two Harbors this year. On Jan. 17, it closed on 39.1 million shares, raising $355 million.

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