Mortgage REIT PennyMac Mortgage Investment Trust (PMT) has announced they will be selling a new Senior Note offering with maturity in 2030.
PMT has a number of outstanding preferreds and senior notes which can be seen here.
The preliminary prospectus is here.
Thanks to J for being on top of this one and for EarlyBird for chiming in on ‘yield talk’ (in the 9-9.125% area).
PennyMac Mortgage Investment Trust 9.00% Senior Notes due 2030
Ticker Symbol: PMTV CUSIP: 70931T707 Exchange: NYSE
I was told by an underwriter that it was priced at 9%.
https://www.sec.gov/Archives/edgar/data/1464423/000119312525020124/d923670dfwp.htm
My guess is this will be well bid, disappointing management didn’t get in the 8’s.
I will never buy anything PMT issues after they screwed over the holders of PMT-A and PMT-B. they were supposed to be floating but PMT decided that the change to SOFR from LIBOR meant they could declare them fixed instead of floating. They are being sued for it.
I downgraded them for that reason but I would buy a price drop if enough investors feel like you do. Opportunity beats emotion in this game.
I understand from a subscription that a trial court ruling is expected soon in the FTF litigation. The outcome is apt to be appealed, of course, but if the judgment is unfavorable to PMT, as many expect, PMT may call the A and B preferreds to cap mounting exposure during the appeal. Even if they don’t, there might be a price bump. I have added A and B shares within the past 10 days. Do your own DD.
Morgan Stanley did similar. Though I think there was some clause buried in their prospectus that allowed it so.
See MS-F, MS-E and MS-I – all 3 callable and coupons of 6.3x-7.125%. I own these in my ‘instead of cash’ bucket and even added to recently when they traded almost at par (with divd accrued)
Surprised they have not already called these – especially MS-E with 7.125% coupon and callable since Oct 2023
mSquare, what is the rate on MS-E? i guess it used to be 3 month libor + 4.32% Is it now 3 month sofr + 4.32%?
MS-E Coupon is 7.125% with last ex-divd Dec 31, 2024 of $4453.
MS-I with lower coupon of 6.375% is currently trading at about par if you count the last 1 month of dividend
Franklin,
MS-E, F, I, and K remain fixed at their original coupons. None of them float.
https://www.morganstanley.com/press-releases/replacement-rate-for-u-s–law-governed-u-s–dollar-libor-linked-
From what I saw MS used the exact same language as other issues…it was their interpretation of what they lawyers told them it said to wiggle off the float. Most issues like these that haven’t been called tend to be very rewarding until they are called. Days/weeks/seasons/years…nobody knows! And some time BAC style they call lower coupon issues ‘just because’…..I call it bonus time when they remain uncalled. Ends up there is little upside just coupon
Its not just mcreits but several big banks have these out there
i read the link from mbg, a little confusing to me…so does this mean that ms-f, e, i, k don’t float at all? and never will float again, so it’s just the stated coupon, as in 6.87% for MS-F? thanks for any help.
franklin, yes – they don’t float at all, and will remain fixed at their initial coupons until (if ever) they’re called. In MS-Fs case, that’s the 6.875% coupon.
This is the sentence that told me:
“After the Cessation Date, dividends or interest on these instruments will continue to accrue at the specified fixed rate.”
1. The “Cessation Date” refers to the final day LIBOR was used.
2. The “specified” fixed rate is the rate they specified for each preferred in the list. For example, they specify 6.875% for MS-F:
Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series F (and related depositary shares) (6.875%)