Business Context and Reporting Period
This Form 8-K is a current report filed by AG Mortgage Investment Trust, Inc. (trading as MITT) on September 16, 2019, regarding events occurring on September 11 and September 13, 2019. The company is a Maryland corporation and a real estate investment trust (REIT) focused on mortgage-backed securities.
Key Financial Metrics and Capital Structure
The filing details a significant capital raise through the issuance of preferred stock rather than reporting operational financial metrics such as revenue or net income.
- Offering Size: 4,000,000 shares of Series C Preferred Stock initially, with a full exercise of the underwriters' option for an additional 600,000 shares, totaling 4,600,000 shares.
- Liquidation Preference: $25.00 per share.
- Dividend Rate: Fixed at 8.000% per annum (equivalent to $2.00 per share) from issuance until September 17, 2024. Thereafter, the rate floats at Three-Month LIBOR plus 6.476%.
- Payment Schedule: Dividends are cumulative and payable quarterly in arrears, commencing December 17, 2019.
- Seniority: The Series C Preferred Stock ranks senior to common stock regarding dividends and liquidation rights.
Material Changes
The primary material change is the entry into a definitive underwriting agreement and the subsequent designation of a new class of preferred stock.
- Underwriting Agreement: Entered on September 11, 2019, with BofA Securities, Morgan Stanley, RBC Capital Markets, UBS Securities, and Keefe, Bruyette & Woods, Inc. as representatives.
- Option Exercise: Underwriters exercised their full option to purchase 600,000 additional shares on September 13, 2019.
- Articles Supplementary: Filed on September 13, 2019, to formally designate the 4,600,000 shares of Series C Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock.
- Closing Date: The offering closing was expected on September 17, 2019.
Outlook, Risks, and Contingencies
The filing outlines specific terms and risks associated with the new preferred stock issuance.
- Redemption Terms: The stock is not redeemable by the company prior to September 17, 2024, except to preserve REIT status or upon a Change of Control. After this date, the company may redeem shares at $25.00 per share plus accrued dividends.
- Change of Control: In the event of a Change of Control, the company may redeem the stock within 120 days. Alternatively, holders have the right to convert the preferred stock into common stock based on a formula.
- Voting Rights: Holders generally have no voting rights, subject to limited exceptions.
- REIT Compliance: Ownership restrictions are in place to ensure the company maintains its qualification as a REIT for U.S. federal income tax purposes.
Investor Verification Checklist
- Verify the final closing date and total proceeds received from the 4,600,000 share offering.
- Confirm the first dividend payment date and amount (expected December 17, 2019).
- Review the full text of the Articles Supplementary (Exhibit 3.1) for detailed conversion formulas and change of control definitions.
- Monitor future filings for any redemption notices or changes to the floating rate spread after September 17, 2024.