NEW YORK - Chimera Investment Corporation (NYSE: NYSE:CIM), a real estate investment trust, has announced the pricing of a $65 million public offering of senior notes due in 2029. The notes carry an interest rate of 9.250% and are set to mature on August 15, 2029, with the company also providing underwriters a 30-day option to purchase up to an additional $9.75 million to cover over-allotments. The offering is expected to close on August 19, 2024, pending customary closing conditions.
The company aims to list these notes on the New York Stock Exchange under the ticker symbol "CIMO" and anticipates trading to commence within 30 days post-issuance, subject to approval.
Chimera plans to allocate the net proceeds from the sale of the notes towards acquiring mortgage assets, which may include residential mortgage loans and various types of mortgage-backed securities (MBS). The funds will also serve general corporate purposes, such as repaying debt, meeting working capital needs, and providing liquidity.
The notes are to be issued as senior unsecured obligations of Chimera, with interest payable quarterly starting November 15, 2024. The company reserves the right to redeem these notes, in whole or in part, at any time on or after August 15, 2026.
Joint book-running managers for the offering include prominent financial institutions such as Morgan Stanley & Co. LLC, RBC Capital Markets, LLC, UBS Securities LLC, Wells Fargo Securities, LLC, Keefe, Bruyette & Woods, Inc., and Piper Sandler & Co.
This offering is made under Chimera's existing shelf registration statement with the Securities and Exchange Commission and requires a prospectus and a related prospectus supplement for any sales.
In other recent news, Chimera Investment Corporation disclosed a strong Q2 performance, accompanied by strategic initiatives. The real estate investment trust completed its first unsecured debt offering, which received an investment-grade rating, marking a significant milestone. They also initiated their first large agency investment since the onset of the pandemic and sponsored their first reperforming loan securitization since May 2023.
A key highlight was the increase in dividends for the first time since March 2021, reflecting the company's financial stability. Chimera reported a GAAP net income of $33.9 million, a book value of $21.27 per share, and economic net interest income of $73 million. The company also implemented a reverse stock split to enhance stock attractiveness.
InvestingPro Insights
As Chimera Investment Corporation (NYSE: CIM) ventures into the public offering of senior notes, the market is closely observing its financial health and growth potential. According to InvestingPro data, Chimera has a market capitalization of $1.14 billion, reflecting its size and significance in the real estate investment trust market.
Investors looking for income-generating assets may find Chimera's significant dividend yield of 9.64% particularly attractive, especially given the company's history of maintaining dividend payments for 18 consecutive years. This consistent performance could be a testament to Chimera's financial resilience and commitment to shareholder returns.
The company's stock price has also seen a notable return over the last week, with a 7.55% total return, indicating a positive short-term investor sentiment. This could be an encouraging sign for potential investors considering the notes offering.
For those seeking a deeper dive into Chimera's financials and future outlook, InvestingPro offers additional insights. There are currently seven more InvestingPro Tips available for Chimera, including expectations for net income growth this year and analyst predictions for profitability. Moreover, the platform's fair value estimate of $17.54 suggests a potential upside from the previous close price of $14.53.
Investors interested in exploring these additional insights can find them on the InvestingPro platform, which provides a comprehensive analysis and real-time data to help make informed investment decisions.
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