mREIT Cherry Hill Mortgage to Sell Fixed to Floating Preferred

mREIT Cherry Hill Mortgage (NASDAQ:CHMI) is offering a new fixed-to-floating rate preferred stock.

We are not familiar with CHMI and thus will not have any real opinion on the new shares when they appear.

The company currently has a 8.20% perpetual preferred issue (CHMI-A) outstanding which can be looked at here.

We will post the term sheet when it is filed as well as the OTC Grey Market ticker.

Preliminary information can be found here.

11 thoughts on “mREIT Cherry Hill Mortgage to Sell Fixed to Floating Preferred”

  1. Cherry Hill Mortgage Investment Corporation Announces Pricing of Public Offering of Series B Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock

    Business Wire Business WireFebruary 4, 2019

    Cherry Hill Mortgage Investment Corporation (CHMI) (the “Company”) today announced that it priced an underwritten public offering of 1,800,000 shares of its 8.250% Series B Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock (the “Series B Preferred Stock”), liquidation preference $25.00 per share, for gross proceeds of $45,000,000, before deducting underwriting discounts and estimated offering expenses.

    The Company has granted the underwriters an option for 30 days to purchase up to an additional 270,000 shares of its Series B Preferred Stock to cover over-allotments. The offering is subject to customary closing conditions and is expected to close on February 11, 2019.

    The Company will contribute the net proceeds from the offering to its operating partnership in exchange for the operating partnership’s 8.250% Series B Fixed-to-Floating Rate Cumulative Redeemable Preferred Units. The Company intends to cause its operating partnership to use the net proceeds of the offering for general corporate purposes, which may include the acquisition of additional residential mortgage-related assets.

    Morgan Stanley & Co. LLC and RBC Capital Markets, LLC are acting as joint book-running managers for the offering. Citigroup Global Markets Inc. is acting as lead manager.

    The offering is being made pursuant to the Company’s existing shelf registration statement that was previously filed with the Securities and Exchange Commission and became effective on December 4, 2017. This press release is neither an offer to sell nor a solicitation of an offer to buy shares of Series B Preferred Stock. The offering of these securities will be made only by means of a prospectus and a related prospectus supplement, a copy of which may be obtained by contacting:

    Morgan Stanley & Co. LLC
    Attention: Prospectus Department
    180 Varick Street
    New York, New York 10014
    Telephone: (800) 584-6837

    RBC Capital Markets, LLC
    Attention: Transaction Management
    200 Vesey Street, 8th Floor
    New York, New York 10281
    Telephone: (866) 375-6829

    The prospectus supplement and the accompanying prospectus shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

    About Cherry Hill Mortgage Investment Corporation

    Cherry Hill Mortgage Investment Corporation is a real estate finance company that acquires, invests in and manages residential mortgage assets in the United States.

  2. Just an FYI.. CHMI is one of Scott Kennedy’s holdings. I think Scott is one of the most credible contributors on SA with focus on BDCs and mREITs. He holds common shares of CHMI.

    1. Good to know Jay. Scott is one of the very few writers I have high regards for–somebody has to dissect the mREIT numbers–guess he got the short straw.

    2. Scott Kennedy:
      “Quick Update: $CHMI offering Series B Preferred Stock (fixed-to-floating rate). Will be interesting to see how the Series B is priced relative to $CHMI.PA . I continue to hold my CHMI Series A shares”
      (from Seeking Alpha)

    1. An SA subscription service put out a buy to members on the A and B preferreds of TOO predicting 30% upside.

      1. It’s unbelievable how a simple article can move this securities…once this kinda things might happen with penny stocks!

  3. Medley Management (MDLY) and its preferreds (MDLX, MDLQ) getting hammered today, the common down 30% and the preferreds 13%. I bought MDLX in Dec. with a $17 handle and recently flipped, so glad I dumped it based on the ugly MDLY chart. Not sure what the news is but the market is unhappy. Anyone still holding these names will want to investigate further.

    1. IMO, Owning any penny stock ( where the common is less than $5) with negative earnings puts you in the gambler category. Holding the preferred is small consolation if they decide to go bankrupt. I used to own GSL preferred but dumped it when I realized their balance sheet had turned negative.

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