Dynex Capital Inc., a real estate investment trust that buys agency and non-agency, residential and commercial mortgage-backed securities, has priced its 12.5 million share common stock offering at $9.12 per share, for gross proceeds of $114 million.
The pricing was at a discount to Dynex's closing price on Thursday of $9.49. As a result, on Friday the company's common stock opened at $9.09.
The underwriters have a 30-day option to purchase an additional 1.875 million shares of the Glen Allen, Va.-based company's common stock. Credit Suisse Securities (USA) LLC, B of A Merrill Lynch and JMP Securities are acting as joint book-running managers for the offering.
Dynex will use the proceeds to buy additional MBS and general corporate purposes. The transaction is expected to close on Feb. 1.
In a prospectus update dated yesterday, Dynex said it expects to report fourth quarter income of between $14.1 million and $14.9 million compared to $1.5 million for the third quarter. Net interest spread for the period should be between 2.53% and 2.59%, an improvement over the third quarter's 2.43%.
The increase in net income is because of the growth in net interest spread during the quarter, Dynex said.
Furthermore, its third quarter results were affected by litigation settlement and related defense costs and a charge on redemption of collateralized financings. The increase in net interest spread is a result of the continued rotation of its investment portfolio from agency RMBS to agency and non-agency CMBS.
