Chimera Investment Corp (NYSE:) announced today the successful issuance and sale of $74.75 million in senior notes, with an interest rate set at 9.250% and a maturity date of August 15, 2029. This financial move, completed on Monday, August 19, 2024, was conducted under the company’s existing shelf registration statement.
The New York-based real estate investment trust specified that the notes will pay interest quarterly, starting on November 15, 2024, and may be redeemed at the company’s discretion on or after August 15, 2026. The redemption price will be the principal amount plus accrued and unpaid interest up to the redemption date.
The notes are senior unsecured obligations of the company and will rank equally with Chimera’s current and future unsecured indebtedness that is not subordinated. They will be structurally junior to any secured debt, as well as to any liabilities of the company’s subsidiaries.
Chimera intends to use the net proceeds, which total approximately $71.9 million after underwriting discounts and estimated offering expenses, to finance the acquisition of mortgage assets, including residential and commercial mortgage-backed securities, and for general corporate purposes such as repaying debt and other liabilities.
In other recent news, Chimera Investment Corporation has announced a $65 million public offering of senior notes, set to mature in 2029. The proceeds from this offering will be allocated towards acquiring mortgage assets and for general corporate purposes.
The company has provided underwriters a 30-day option to purchase up to an additional $9.75 million to cover any over-allotments. Financial institutions such as Morgan Stanley & Co. LLC, RBC Capital Markets, LLC, and UBS Securities LLC are among the joint book-running managers for this offering.
In other developments, Chimera disclosed a strong Q2 performance, marked by strategic initiatives including its first unsecured debt offering, which received an investment-grade rating. The company also initiated its first large agency investment since the onset of the pandemic and sponsored its first reperforming loan securitization since May 2023.
A notable highlight was the increase in dividends for the first time since March 2021, reflecting the company’s financial stability. For the quarter, 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. These recent developments underline Chimera’s active management of its financial health and strategic growth initiatives.
InvestingPro Insights
As Chimera Investment Corp (NYSE:CIM) fortifies its financial position through the recent issuance of senior notes, real-time data and insights from InvestingPro paint a broader picture of the company’s performance and outlook. With a market capitalization of approximately $1.22 billion, Chimera presents itself as a noteworthy player in the real estate investment trust sector. The company’s P/E ratio stands at 8.42, reflecting a valuation that may attract investors looking for potentially undervalued opportunities.
InvestingPro Tips highlight that Chimera is expected to see net income growth this year, which could signal a strengthening financial profile following the capital raised from the note issuance. Furthermore, the company’s substantial dividend yield of 9.35% underscores its commitment to returning value to shareholders, a practice it has maintained for 18 consecutive years. This robust dividend profile, coupled with a stock price that is currently at 80.51% of its 52-week high, may appeal to income-focused investors.
For those considering an investment in Chimera, additional insights are available. InvestingPro offers a suite of further tips to guide investment decisions, providing a comprehensive analysis of the company’s financial health and market position. There are six additional InvestingPro Tips available for Chimera, accessible through the InvestingPro platform.
The company’s use of the proceeds from the senior notes to potentially acquire mortgage assets indicates a strategic approach to asset management and growth. As Chimera continues to navigate the real estate investment landscape, these InvestingPro metrics and tips offer valuable context for current and prospective investors.
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