On Wednesday, Atlanta, Georgia-based real estate investment trust Invesco Mortgage Capital Inc. (IVR) announced its plan to offer 20 million shares of common stock. During the height of volatility in equity markets, this offering announcement reflects management’s expectation of a slowdown in stock market in the near future. As a result, the company is raising capital now to fund acquisitions at cheaper prices in future.
Underwriters will be permitted a 30-day option to purchase up to an added three million shares to cover over-allotments.
Credit Suisse Securities (USA) LLC, a subsidiary of Credit Suisse (CS) and Morgan Stanley & Co. LLC, a division of Morgan Stanley (MS) are acting as joint book-running managers for the offering.
Earlier this year, Invesco Mortgage completed the public offering of 19.6 million shares for gross proceeds of approximately $393.9 million in June and 21.9 million shares for net proceeds of approximately $460.2 millionin March.
In December 2010, Invesco Mortgagecompleted a public offering of 10.0 million shares. This offering produced net proceeds of approximately $214.0 million.
Invesco intends to use the proceeds from the latest offering to buy residential and commercial mortgage-backed securities and mortgage loans.The continuation of capital raising initiatives will help the company reduce its total debt burden considerably. However, there will be a dilutive impact on earnings per share.
Invesco Mortgage Capital is externally managed and advised by Invesco Advisers Inc., a subsidiary of Invesco Ltd. (IVZ), a leading independent global investment management company.
Both Invesco Mortgage Capital and Invesco Ltd. currently retain a Zacks #3 Rank, which translates into a short-term ‘Hold’ rating.
CREDIT SUISSE (CS): Free Stock Analysis Report
INVESCO MORTGAG (IVR): Free Stock Analysis Report
INVESCO LTD (IVZ): Free Stock Analysis Report
MORGAN STANLEY (MS): Free Stock Analysis Report
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