Ready Capital Corp. 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed by Ready Capital Corporation on June 10, 2021. The filing reports the classification and issuance of a new series of preferred stock and the subsequent use of proceeds to redeem existing debt instruments.
Key Financial Metrics and Capital Structure
- New Issuance: 4,600,000 shares of 6.50% Series E Cumulative Redeemable Preferred Stock.
- Liquidation Preference: $25.00 per share.
- Net Proceeds: $111,377,500 (before expenses).
- Dividend Rate: 6.50% per annum, payable quarterly in arrears.
- Capital Structure Impact: The Series E Preferred Stock ranks senior to common stock and on parity with Series B, Series C, and Series D Preferred Stock regarding dividend and liquidation rights.
Material Changes and Use of Proceeds
The primary material change is the capital raise via the Series E Preferred Stock. The Company intends to contribute the net proceeds to its operating partnership, Sutherland Partners, L.P. These funds will be used to redeem, in whole or in part, the Company's 8.625% Series B Cumulative Preferred Stock and 7.625% Series D Cumulative Redeemable Preferred Stock.
Management Commentary and Risks
The filing incorporates by reference the prospectus supplement dated June 3, 2021, for a complete description of the Series E Preferred Stock terms. The issuance is subject to the Company's restrictions on paying dividends on junior or parity stock unless cumulative dividends on the Series E Preferred Stock are fully paid or set aside. The filing does not provide specific guidance on future earnings or liquidity beyond the immediate use of proceeds.
Investor Verification Checklist
- Verify the exact redemption amounts for Series B and Series D Preferred Stock to be funded by the $111.4 million proceeds.
- Review the prospectus supplement (dated June 3, 2021) for full terms, redemption features, and voting rights of the Series E Preferred Stock.
- Confirm the impact of the new 6.50% dividend obligation on the Company's overall cost of capital compared to the redeemed Series B (8.625%) and Series D (7.625%) instruments.
- Check subsequent filings for the actual execution of the Series B and Series D redemptions.