Vulture fund PennyMac Mortgage Investment Trust on Thursday said it will sell 8 million additional shares of common, using some of the proceeds to purchase $250.5 million worth of whole loans.
As part of the offering, PennyMac has granted its underwriter the right to buy 1.2 million additional shares to cover any over allotments. In early trading, PennyMac's stock was down 3% to $18.12.
In a statement, the Calabasas-based REIT said all of the shares will be issued under its "currently effective shelf registration statement" that was filed with the Securities and Exchange Commission.
The company said the whole loan purchase — scheduled to close this month — involves the acquisition of two portfolios, a deal that is subject to "due diligence and other customary closing conditions."
It adds that should it "fail to acquire one or both portfolios, the company will use any remaining proceeds for other general corporate purposes, including funding its investment activity."
Citigroup — which has lent money to PennyMac — will serve as sole book-running manager for the offering.