Street Calls of the Week
Rithm Capital Corp. (NYSE:RITM), a $6.14 billion market cap real estate investment company currently trading at $11.60 per share, announced Thursday it has designated 8,740,000 shares of its authorized preferred stock as 8.750% Series E Fixed-Rate Cumulative Redeemable Preferred Stock, according to a statement based on a filing with the Securities and Exchange Commission. InvestingPro analysis suggests the stock is currently undervalued, trading at an attractive P/E ratio of 8.87.
The Series E Preferred Stock carries a par value of $0.01 per share and a liquidation preference of $25.00 per share. Holders will be entitled to receive cumulative cash dividends at a fixed annual rate of 8.750%, payable quarterly in arrears on or about the 15th day of February, May, August, and November, starting from September 25, 2025. Dividends are subject to declaration by the company’s board of directors and availability of legally permitted funds.
The Series E Preferred Stock ranks senior to Rithm Capital’s common stock with respect to dividend payments and rights in the event of voluntary or involuntary liquidation, dissolution, or winding up of the company.
The preferred stock is not redeemable by Rithm Capital before November 15, 2030, except in certain circumstances related to maintaining the company’s real estate investment trust (REIT) status or upon a defined Change of Control event. Beginning November 15, 2030, the company may redeem the shares, in whole or in part, at $25.00 per share plus any unpaid dividends, with at least 30 days’ notice.
In the event of a Change of Control, Rithm Capital may redeem the Series E Preferred Stock within 120 days, or holders may have the right to convert their shares into Rithm Capital common stock under specified terms.
The Series E Preferred Stock has no stated maturity and is not subject to any sinking fund or mandatory redemption. Holders generally do not have voting rights, except in limited circumstances such as nonpayment of dividends for six or more full quarterly periods.
The Certificate of Designations outlining these terms became effective upon filing with the Secretary of State of Delaware on Thursday. This information is based on a press release statement and the company’s SEC filing. For investors seeking deeper insights into Rithm Capital’s financial health and growth prospects, InvestingPro offers comprehensive analysis through its Pro Research Report, available alongside 1,400+ other top US stocks, providing actionable intelligence for smarter investment decisions.
In other recent news, Rithm Capital Corp. has announced a $750 million at-the-market equity offering program. The company has entered into a distribution agreement with several financial institutions, including BofA Securities and Barclays Capital, to facilitate this offering. Additionally, Rithm Capital has priced an underwritten public offering of 7.6 million shares of its 8.75% Series E Fixed-Rate Cumulative Redeemable Preferred Stock, expected to generate approximately $190 million in gross proceeds. This preferred stock will be listed on the New York Stock Exchange under the symbol "RITM PR E."
Furthermore, Rithm Capital has launched another underwritten public offering of Series E Fixed-Rate Cumulative Redeemable Preferred Stock. The company has granted underwriters a 30-day option to purchase up to an additional 15% of shares to cover potential over-allotments. In a significant development, Rithm Capital has entered into an agreement to acquire Paramount Group, Inc. in an all-cash transaction valued at approximately $1.6 billion. Under this agreement, Rithm will acquire all outstanding shares of Paramount common stock for $6.60 per share. The deal has been approved by the boards of both companies and is expected to close in the fourth quarter of 2025.
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