The company said the proceeds are slated to be used to fund its business and investment activities and those of its subsidiaries. These may include distressed and/or jumbo loan purchases, expanded correspondent lending, indebtedness and other general corporate purposes.
Initial purchasers have a 30-day option from the date of the offering to purchase up to an additional $50 million aggregate principal amount of notes from PennyMac Corp.
The notes are being offered only to qualified institutional buyers pursuant to Rule 144A under the Securities Act. Settlement is subject to customary closing conditions and is expected to occur on April 30. Neither the Notes nor the Common Shares issuable upon exchange of the Notes may be offered or sold in the United States without registration or an applicable exemption from the registration requirements of the Securities Act.
The notes will bear interest at a rate of 5.375% per year, payable semiannually. They will be fully and unconditionally guaranteed by PennyMac Mortgage Investment Trust and exchangeable for the company’s common shares of beneficial interest at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. The notes will mature May 1, 2020 unless repurchased or exchanged in accordance with their terms prior to that date.
The exchange rate for the notes will initially equal 33.5149 common shares per $1,000 principal amount of notes, which is equivalent to an initial exchange price of approximately $29.84 per common share. The initial exchange price is approximately 25% above the $23.87 per common share closing price of PennyMac Mortgage Investment Trust’s common shares on the New York Stock Exchange as of April 24.
