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Two Harbors Investment Corp . (NYSE:TWO), a real estate investment trust with a market capitalization of $1.25 billion and an impressive 15.03% dividend yield, announced the completion of a $115 million offering of 9.375% Senior Notes due 2030. According to InvestingPro data, the company has maintained dividend payments for 17 consecutive years, making it an interesting case for income-focused investors. The notes were issued on Tuesday, May 13, 2025, including an over-allotment option exercised by underwriters for an additional $15 million in notes.
The offering was conducted under the company’s existing shelf registration statement and facilitated by Morgan Stanley (NYSE:MS) & Co. LLC, Goldman Sachs & Co. LLC, and other underwriters. The notes, which were issued at par, will pay interest quarterly and are set to mature on August 15, 2030. Two Harbors retains the option to redeem the notes on or after May 15, 2027.
The notes rank senior to any future subordinated debt and equal with the company’s current unsecured debt. They are effectively junior to any secured indebtedness and structurally junior to existing and future subsidiary indebtedness and preferred equity. InvestingPro analysis shows the company’s debt position is significant, with a debt-to-equity ratio of 7.08 and a current ratio of 0.21, indicating tight liquidity conditions.
The indenture governing the notes includes customary default provisions, which could accelerate payment obligations under certain conditions. The net proceeds, estimated at approximately $110.8 million after discounts, commissions, and expenses, are intended for general corporate purposes, which may include debt refinancing or repayment, asset purchases, share repurchases, or other capital expenditures. While currently showing negative earnings, InvestingPro analysts expect the company to return to profitability this year. For deeper insights into TWO’s financial health and detailed analysis, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
This transaction is based on a press release statement and reflects information provided in the SEC filing.
In other recent news, Two Harbors Investment Corp reported its first-quarter 2025 financial results, which fell short of expectations. The company announced an earnings per share (EPS) of $0.24, missing the anticipated $0.41. Revenue also came in below forecasts, with a reported figure of -$20.33 million compared to the expected -$12.86 million. Despite these misses, the company increased its book value per share from $14.47 to $14.66, indicating asset growth. Comprehensive income for the quarter was $64.9 million, or $0.62 per weighted average common share, reflecting a quarterly economic return of 4.4%.
In the realm of analyst activity, there were no specific upgrades or downgrades mentioned, but strategic comments from executives suggest a focus on long-term growth and managing market volatility. CEO Bill Greenberg highlighted the strategic expansion opportunities through the Roundpoint platform, while Chief Investment Officer Nick Ledica noted the company’s portfolio management amid market uncertainties. The company continues to emphasize its strategic focus on technology and AI, even as economic uncertainty and policy changes pose challenges. Overall, Two Harbors maintains a cautious approach due to market volatility but remains comfortable supporting its current dividend.
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