On Tuesday, Atlanta, Georgia-based real estate investment trust Invesco Mortgage Capital Inc. (IVR) announced the completion of its public offering of 20 million shares of common stock.
Invesco Mortgage stated that the offering led to proceeds of nearly $367.4 million, before deducting offering expenses and underwriting discounts. The company also asserted that underwriters have been permitted a 30-day option to purchase up to 3 million shares to cover over-allotments.
On August 17, Invesco Mortgage had announced its plan to offer the shares.
Credit Suisse Securities (USA) LLC, a subsidiary of Credit Suisse (CS), and Morgan Stanley & Co. LLC, a division of Morgan Stanley (MS), acted 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 about $460.2 million in March.
Prior to these, in December 2010, Invesco Mortgage had also completed a public offering of 10.0 million shares. This offering had produced net proceeds of around $214.0 million.
The announcement and closure of the common stock offering during the peak of equity market volatility reflects Invesco Mortgage’s expectation of a slowdown in stock market in the near future. As a result, the company raised the capital now to fund acquisitions at cheaper prices in the future.
Invesco Mortgage also 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 a leading independent global investment management company Invesco Ltd. (IVZ).
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
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment