It took a little time, but Rithm Property Trust (RPT) has priced their new fixed-to-floating rate preferred issue.
The issue priced at a fixed rate of 9.875%. The issue goes to floating rate on 5/15/2030 at 3 month SOFR plus a spread of 5.56%.
This is an unrated issue and one must remember risk equals reward–this is a dicey issue. Deep due diligence should be done by investors. This is the old Great Ajax mREIT which originally invested in non performing and re-performing residential mortgages which is now swinging toward commercial mortgages.
The pricing term sheet can be seen here.
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I’m lost, they just got $24.21875 for shares they issued, and almost immediately were buying them back at $25 on 3/4? Isn’t that just throwing away 348k on 400k shares?
dufus,
RPT, not RITM, issued this preferred. RPT got the $24.21875 per share proceeds.
RITM is the external manager of RPT. RITM (not RPT) paid $25 for those shares.
Rithm 9.875% Series C permanent ticker RPT-C/RPTPRC
https://www.sec.gov/Archives/edgar/data/1614806/000110465925022178/tm258631d1_424b5.htm
RPTCV is live on Fidelity to buy online, ask 24.85.
Not off to a great start.. It was trading around $24.50 yesterday, give or take. The temp ticker (RPTCV) is listed on most platforms now but not available to trade yet, last I looked.
It’s certainly junkie, but I have been known to be an mREIT junkie.. and think this is one has some risk protections. So I will likely buy if its stays at these levels.. knowing it can trade down w the market.
They were brave to come to market with this structure vs term pref…IMO.
my guess is the terms in their 2027 note restricted them from issuing more debt.. just a guess, didn’t look too close.
Temp symbol “RPTCV”.
https://otce.finra.org/otce/dailyList?viewType=Additions
02/27/2025 10:33:43
RPTCV
RITHM PPTY TR INC PFD SER C
It should be RPT PRD
Peppino, the term sheet says the permanent symbol will be “RPTP”.
Listing: The Issuer intends to file an application to list the Series C Preferred Stock on the NYSE under the symbol “RPTP”. If the application is approved, trading of the Series C Preferred Stock on the NYSE is expected to begin within 30 days after the Series C Preferred Stock is first issued
Not much less than RITM-A. Calls and reissues and typically done for a larger spread. This one is puzzling unless they expect rates to climb soon.
Martin,
It’s a new issue by RPT, not RITM calling RITM-A and reissuing a new one in it’s place. As I understand, RPT and RITM are connected via an RITM subsidiary that is the external manager of RPT.
Fidelity rating for 2 companies:
RITM 15 (Value), 16 (Quality), 12 (Growth), 98 Health)
RPT 3 (Value), 2 (Quality), 51 (Growth), 46 (Health)
Note RITM has a health of 98.
“health of 98”
Higher numbers good?
Yes
Ritm very healthy, not great quality, growth or common value