NEW YORK - Chimera Investment Corporation (NYSE: NYSE:CIM), a real estate investment trust (REIT), has announced the pricing of a public offering of $65 million in senior notes with a 9.00% interest rate, maturing in 2029.
The company also provided underwriters a 30-day option to buy an additional $9.75 million in notes to cover over-allotments. The offering is slated to close on May 22, 2024, pending customary closing conditions.
The notes, if approved for listing, will appear on the New York Stock Exchange under the ticker symbol "CIMN," with trading expected to commence within 30 days post-issuance.
Chimera plans to allocate the net proceeds towards acquiring mortgage assets, such as residential mortgage loans and various mortgage-backed securities (MBS), and for general corporate purposes. These may include repaying debt, working capital, and liquidity needs.
The notes are senior unsecured obligations of Chimera and will pay quarterly interest on the 15th of February, May, August, and November, starting August 15, 2024. The notes will mature on May 15, 2029, with an option for the company to redeem them partially or in full at its discretion on or after May 15, 2026.
Joint book-running managers for the offering include Morgan Stanley (NYSE:MS) & Co. LLC, RBC (TSX:RY) Capital Markets, LLC, UBS Securities LLC, Wells Fargo (NYSE:WFC) Securities, LLC, Keefe, Bruyette & Woods, Inc., and Piper Sandler & Co.
The offering is made under Chimera's existing shelf registration statement filed with the Securities and Exchange Commission. A prospectus and related prospectus supplement are required for the offering, available upon request from the book-running managers.
Chimera Investment Corporation specializes in a diversified portfolio of mortgage assets, including a mix of residential mortgage loans and real estate-related securities.
The company has cautioned investors that this press release contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from expectations.
This news is based on a press release statement from Chimera Investment Corporation.
InvestingPro Insights
As Chimera Investment Corporation (NYSE: CIM) embarks on its public offering of senior notes, investors may be keen to understand the company's financial health and market position. According to InvestingPro, Chimera's net income is expected to grow this year, which could signal a strengthening of the company's profitability amidst its current capital-raising efforts. This is particularly relevant as the company looks to expand its mortgage asset acquisitions.
InvestingPro data illustrates that Chimera is currently trading at a low Price / Book multiple of 0.41 as of Q1 2024, suggesting that the stock may be undervalued compared to the company's book value. Moreover, with a notable dividend yield of 9.82% as of the latest data, Chimera continues to reward shareholders with significant income, a factor that could appeal to income-focused investors considering the new senior notes offering.
For investors interested in further analysis and metrics, InvestingPro offers additional insights, including the fact that Chimera has maintained dividend payments for 18 consecutive years. This consistency in returning value to shareholders may provide confidence in the company's financial management and long-term stability. To access these insights and more, investors are encouraged to explore the full suite of InvestingPro Tips, which currently lists 7 additional tips for Chimera. Remember to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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