PennyMac Mortgage Investment Trust (NYSE:PMT) Files An 8-K Entry into a Material Definitive Agreement

ME Staff 8-k
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PennyMac Mortgage Investment Trust (NYSE:PMT) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.

On July5, 2017, in connection with the closing of the offering by PennyMac Mortgage Investment Trust, a Maryland real estate investment trust (the “Company”), of7,000,000 shares of 8.00% SeriesB Fixed-to-Floating Rate Cumulative Redeemable Preferred Shares of Beneficial Interest, liquidation preference $25.00 per share, $0.01 par value per share (the “SeriesB Preferred Shares”), PennyMac GP OP,Inc., a wholly-owned subsidiary of the Company and the general partner of PennyMac Operating Partnership, L.P., a Delaware limited partnership and the operating partnership of the Company (the “Operating Partnership”), amended the Operating Partnership’s Amended and Restated Limited Partnership Agreement (the “Second Amendment”) to designate limited partnership units (the “SeriesB Preferred Units”) with substantially the same terms as the SeriesB Preferred Shares to be issued to the Company in exchange for the net proceeds from the Company’s sale of the SeriesB Preferred Shares.

A copy of the Second Amendment is filed as Exhibit10.1 to this Current Report on Form8-K, and the information in the Second Amendment is incorporated into this Item 1.01 by reference. The description of the terms of the Second Amendment in this Item 1.01 is qualified in its entirety by reference to Exhibit10.1.

Item 3.03. Material Modification to Rights of Security Holders.

On June30, 2017, the Company filed Articles Supplementary (the “Articles Supplementary”) to the Company’s Declaration of Trust, as amended and restated (the “Declaration of Trust”), with the State Department of Assessments and Taxation of the State of Maryland. The Articles Supplementary classified and designated 8,050,000 shares of the Company’s authorized but unissued preferred shares of beneficial interest, par value $0.01 per share (“Preferred Shares”), as a separate class of Preferred Shares identified as the 8.00% SeriesB Fixed-to-Floating Rate Cumulative Redeemable Preferred Shares of Beneficial Interest, with the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications, and terms and conditions of redemption as set forth in the Articles Supplementary. The Articles Supplementary became effective upon filing on June30, 2017.

The Articles Supplementary provide that the Company will pay, when, as and if authorized by the Board of Trustees of the Company, cumulative cash dividends (i)from, and including, the date of original issuance of the SeriesB Preferred Shares (the “Original Issuance Date”) (which was July5, 2017) to, but not including, June15, 2024, at a fixed rate equal to 8.00% per annum based on the $25.00 per share liquidation preference, or $2.00 per share, and (ii)from, and including, June15, 2024 and thereafter, at a floating rate equal to three-month LIBOR plus a spread of 5.99% per annum based on the $25.00 per share liquidation preference. Dividends on the SeriesB Preferred Shares will be payable in arrears on the 15th day of March, June, Septemberand Decemberof each year (provided that if any dividend payment date is not a business day, then the dividend which would otherwise have been payable on that dividend payment date may be paid on the next succeeding business day). The first dividend on the SeriesB Preferred Shares is scheduled to be paid on September15, 2017 in the amount of $0.38889 per share and will represent accrual for less than the full quarterly period, covering the period from, and including, the Original Issuance Date to, but not including, September15, 2017.

The SeriesB Preferred Shares will not be redeemable by the Company prior to June15, 2024, except in connection with the Company’s qualification as a real estate investment trust for U.S. federal income tax purposes and except upon the occurrence of a Change of Control (as defined in the Articles Supplementary). On and after June15, 2024, the Company may, at its option, upon not less than 30 nor more than 60 days’ written notice, redeem the SeriesB Preferred Shares, in whole or in part, at any time or from time to time, for cash at a redemption price of $25.00 per share, plus any accumulated and unpaid dividends thereon to, but not including, the redemption date.

In addition, upon the occurrence of a Change of Control, the Company may, at its option, upon not less than 30 nor more than 60 days’ written notice, redeem the SeriesB Preferred Shares, in whole or in part, within 120 days after the first date on which such Change of Control occurred, for cash at a redemption price of $25.00 per share, plus any accumulated and unpaid dividends thereon to, but not including, the redemption date.

The SeriesB Preferred Shares have no stated maturity and will not be subject to any sinking fund or mandatory redemption, and will remain outstanding indefinitely unless (i)the Company decides to redeem or otherwise repurchase the SeriesB Preferred Shares or (ii)the SeriesB Preferred Shares become convertible and are actually converted into the Company’s common shares of beneficial interest, $0.01 par value per share (“Common Shares”), in connection with a Change of Control by the holders of SeriesB Preferred Shares.

Upon the occurrence of a Change of Control, each holder of SeriesB Preferred Shares will have the right (unless, prior to the Change of Control Conversion Date (as defined in the Articles Supplementary), the Company has provided notice of its election to redeem some or all of the SeriesB Preferred Shares held by such holder, as described above, in which case such holder will have the right only with respect to SeriesB Preferred Shares that are not called for redemption) to convert some or all of the SeriesB Preferred Shares held by such holder on the Change of Control Conversion Date into a number of Common Shares per SeriesB Preferred Shares to be converted determined by a formula, in each case, on the terms and subject to the conditions described in the Articles Supplementary, including provisions for the receipt, under specified circumstances, of alternative consideration.

The SeriesB Preferred Shares rank, with respect to rights to the payment of dividends and the distribution of assets in the event of any liquidation, dissolution or winding up of the Company, (i)senior to all classes or series of Common Shares and to all other equity securities issued by the Company other than equity securities referred to in clauses (ii)and (iii)below; (ii)on a parity with the Company’s 8.125% SeriesA Fixed-to-Floating Rate Cumulative Redeemable Preferred Shares of Beneficial Interest, $0.01 par value per share, and all other equity securities issued by the Company with terms specifically providing that those equity securities rank on a parity with the SeriesB Preferred Shares with respect to rights to the payment of dividends and the distribution of assets upon any liquidation, dissolution or winding up of the Company; and (iii)junior to all equity securities issued by the Company with terms specifically providing that those equity securities rank senior to the SeriesB Preferred Shares with respect to rights to the payment of dividends and the distribution of assets upon any liquidation, dissolution or winding up of the Company. The term “equity securities” in the foregoing does not include convertible or exchangeable debt securities.

The SeriesB Preferred Shares will be subject to the restrictions on ownership and transfer set forth in ArticleVII of the Company’s Declaration of Trust. Except under the limited circumstances set forth in the Articles Supplementary, holders of the SeriesB Preferred Shares generally will have no voting rights.

A copy of the Articles Supplementary and a specimen certificate for the SeriesB Preferred Shares are filed as Exhibits 3.1 and 4.1, respectively, to this Current Report on Form8-K, and the information in the Articles Supplementary is incorporated into this Item 3.03 by reference. The description of the terms of the Articles Supplementary in this Item 3.03 is qualified in its entirety by reference to Exhibit3.1.

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

The information set forth above under Item 3.03 of this Current Report on Form8-K is hereby incorporated by reference into this Item 5.03.

Item 8.01 Other Events.

On June27, 2017, the Company, the Operating Partnership and PNMAC Capital Management, LLC, a Delaware limited liability company and the manager of the Company (the “Manager”), entered into a Purchase Agreement (the “Purchase Agreement”) with Morgan Stanley& Co. LLC, Keefe, Bruyette& Woods,Inc. and RBC Capital Markets, LLC (collectively, the “Underwriters”), relating to the issuance and sale by the Company and the purchase by the Underwriters, severally, of 7,000,000 SeriesB Preferred Shares at a public offering price of $25.00 per share. to the Purchase Agreement, the Company granted the Underwriters a 30-day option to purchase up to an additional 1,050,000 SeriesB Preferred Shares solely to cover over-allotments. The offering closed on July5, 2017 and the Company received net proceeds from the offering of approximately $169.3 million, after deducting the underwriting discounts and commissions and the Company’s estimated expenses. If the Underwriters exercise their option to purchase additional SeriesB Preferred Shares during the 30-day over-allotment period, the Company will receive additional net proceeds of up to approximately $25.4 million.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit Number

Description

1.1

Purchase Agreement, dated June27, 2017, among the Company, the Operating Partnership, the Manager and Morgan Stanley& Co. LLC, Keefe, Bruyette& Woods,Inc. and RBC Capital Markets, LLC

3.1

Articles Supplementary classifying anddesignating the 8.00% SeriesB Fixed-to-Floating Rate Cumulative Redeemable Preferred Shares of Beneficial Interest (incorporated by reference to Exhibit3.3 of the Company’s Registration Statement on Form8-A, filed on June30, 2017)

4.1

Specimen Certificate for 8.00% SeriesB Fixed-to-Floating Rate Cumulative Redeemable Preferred Shares of Beneficial Interest (incorporated by reference to Exhibit4.1 of the Company’s Registration Statement on Form8-A, filed on June30, 2017)

5.1

Opinion of Venable LLP as to the legality of the 8.00% SeriesB Fixed-to-Floating Rate Cumulative Redeemable Preferred Shares of Beneficial Interest

10.1

Second Amendment to the Amended and Restated Limited Partnership Agreement of PennyMac Operating Partnership, L.P., dated as of July5, 2017

23.1

Consent of Venable LLP (included in Exhibit5.1)


PennyMac Mortgage Investment Trust Exhibit
EX-1.1 2 a17-16037_1ex1d1.htm EX-1.1 Exhibit 1.1   EXECUTION VERSION       PENNYMAC MORTGAGE INVESTMENT TRUST   (a Maryland real estate investment trust)   7,…
To view the full exhibit click here

About PennyMac Mortgage Investment Trust (NYSE:PMT)

PennyMac Mortgage Investment Trust is a specialty finance company that invests primarily in residential mortgage loans and mortgage-related assets. The Company conducts all of its operations, and makes all of its investments, through PennyMac Operating Partnership, L.P. and its subsidiaries. It operates through two segments: correspondent production and investment activities. The correspondent production segment represents its operations aimed at serving as an intermediary between mortgage lenders and the capital markets by purchasing, pooling and reselling newly originated prime credit quality mortgage loans either directly or in the form of mortgage-backed securities (MBS), using the services of PNMAC Capital Management and PennyMac Loan Services, LLC. The investment activities segment represents its investments in mortgage-related assets, which include distressed mortgage loans, real estate acquired in settlement of loans, MBS, mortgage servicing rights and excess servicing spread.