PennyMac Mortgage Investment Trust is bolstering its balance sheet with a new debt offering. An indirect subsidiary, PennyMac Corp., has priced an offering of $75 million in 8.500% Exchangeable Senior Notes due 2029. This issuance is a further reopening of previously issued notes, adding to the existing $291.5 million in aggregate principal amount. The transaction is expected to close on December 22, 2025, subject to customary closing conditions.
These notes carry a semiannual interest payment on June 1 and December 1, with the full and unconditional guarantee of the parent company, PennyMac Mortgage Investment Trust (PMT). A key feature of these notes is their exchangeability. Upon conversion, PennyMac Corp. has the option to deliver cash, PMT’s common shares, or a combination of both, to satisfy its obligation beyond the principal amount. The initial exchange rate is set at 63.3332 common shares per $1,000 principal amount, translating to an initial exchange price of approximately $15.79 per share. This price represents a roughly 20% premium over PMT’s closing share price on December 18, 2025. The notes are classified as senior unsecured obligations, ranking equally with existing and future senior unsecured debt, and senior to any subordinated debt. They are set to mature on June 1, 2029, unless earlier repurchased or exchanged.
The offering is anticipated to yield approximately $75.6 million in net proceeds, after accounting for estimated offering expenses. These funds are earmarked for strategic uses, including repaying a portion of borrowings under the company’s secured mortgage servicing rights and servicing advance facilities, as well as repurchasing or retiring a portion of PMC’s 5.500% Exchangeable Senior Notes due 2026. The remainder will be allocated to other general corporate purposes.
This capital raise occurs within a dynamic financial landscape where mortgage REITs continuously manage their capital structure to optimize returns and mitigate risk. The use of exchangeable senior notes offers a mechanism to raise debt capital while potentially managing future equity dilution. The premium embedded in the exchange price suggests management’s confidence in future share performance, while also providing a defined cost of capital. The proceeds’ allocation towards servicing advance facilities and existing debt highlights a focus on optimizing liquidity and managing debt maturity profiles, crucial for a company operating in the mortgage servicing sector. The ability to service mortgage loans efficiently, especially during periods of interest rate volatility or borrower distress, is a core competency for companies like PennyMac, and maintaining adequate liquidity for servicing advances is paramount.
The offering is being conducted under an effective shelf registration statement and prospectus, supplemented by a prospectus supplement.
**About PennyMac Mortgage Investment Trust**
PennyMac Mortgage Investment Trust is a mortgage real estate investment trust (REIT) specializing in investments in residential mortgage loans and related assets. The company is externally managed by PNMAC Capital Management, LLC, a subsidiary of PennyMac Financial Services, Inc.
**Forward-Looking Statements**
This press release contains forward-looking statements, as defined by the Securities Exchange Act of 1934. These statements reflect management’s current beliefs, estimates, and assumptions regarding the company’s financial performance, future operations, business strategies, and market conditions. Actual results may differ materially due to various factors, including but not limited to, interest rate fluctuations, regulatory changes, market volatility, competition, operational performance of its managers and servicers, cybersecurity risks, capital availability, and other risks detailed in the company’s filings with the Securities and Exchange Commission. The company undertakes no obligation to publicly update or revise any forward-looking statements.
Original article, Author: Jam. If you wish to reprint this article, please indicate the source:https://aicnbc.com/14733.html
