Business Context and Reporting Period
This Form 8-K Current Report, dated November 25, 2019, details a material definitive agreement entered into by Ready Capital Corporation. The report covers the completion of a public offering of senior notes on December 2, 2019, and the execution of the related underwriting agreement on November 25, 2019.
Key Financial Metrics
- Debt Issuance: $45.00 million aggregate principal amount of 6.20% Senior Notes due 2026.
- Net Proceeds: Approximately $43.91 million after underwriters' discount and estimated offering expenses.
- Over-Allotment Option: Underwriters hold a 30-day option to purchase up to an additional $6.75 million.
- Interest Rate: 6.20% per annum, payable quarterly in arrears.
- Maturity Date: July 30, 2026.
- Interest Accrual: Begins October 30, 2019; first payment due January 30, 2020.
Material Changes
The Company expanded its existing 6.20% Senior Notes due 2026 series (originally $57.50 million issued in July 2019) by adding $45.00 million in new notes. The new notes are fully fungible with the existing notes and trade under the same NYSE symbol (RCB). The net proceeds are being contributed to the Operating Partnership, Sutherland Partners, L.P., to originate or acquire target assets and for general business purposes.
Outlook, Risks, and Terms
- Redemption Terms: The Company may redeem notes on or after July 30, 2022, at 101% of principal plus accrued interest. On or after July 30, 2025, redemption is at 100% of principal plus accrued interest.
- Change of Control: Holders may require the Company to repurchase notes at 101% of principal plus accrued interest upon a change of control repurchase event.
- Security Status: The notes are senior unsecured obligations, ranking equal to existing unsecured debt and structurally junior to subsidiary indebtedness.
- Event of Default: May trigger immediate payment of outstanding principal and accrued interest.
Investor Verification Checklist
- Verify the final closing date and total principal amount issued, including any exercise of the $6.75 million over-allotment option.
- Confirm the exact net proceeds received after finalizing offering expenses.
- Review the full text of the Underwriting Agreement and Indenture (Exhibits 1.1, 4.1, 4.2, 4.3, 4.4) for specific covenants and default conditions.
- Monitor the allocation of proceeds to Sutherland Partners, L.P. and subsequent asset acquisition activity.