Angel Oak Mortgage REIT, Inc. (NYSE:AOMR) announced on Wednesday that it has entered into an underwriting agreement for the public offering of $50 million of its 9.500% Senior Notes due 2029. The offering, which was made in connection with an effective shelf registration statement previously filed on June 27, 2024, and declared effective on July 9, 2024, is expected to close on July 25, 2024.
The Atlanta-based real estate investment trust, which operates within the mortgage lending sector, has stated that the net proceeds of approximately $47.7 million, after underwriting discounts and estimated offering expenses, will be used for general corporate purposes. These may include acquiring non-qualified residential mortgage loans and other target assets. Moreover, a portion of the proceeds will be allocated to repurchase approximately 1.7 million shares of the company's common stock from Xylem (NYSE:XYL) Finance LLC, an affiliate of Davidson Kempner Capital Management LP, at an aggregate repurchase price of around $20 million.
The notes will be fully and unconditionally guaranteed by Angel Oak Mortgage Operating Partnership, LP, and are being offered through a syndicate of underwriters led by RBC Capital Markets, LLC, UBS Securities LLC, Wells Fargo Securities, LLC, and Piper Sandler & Co.
This financial move comes as part of Angel Oak Mortgage REIT's broader strategy to manage its portfolio of assets and liabilities effectively. The company's senior notes will be issued under an indenture with U.S. Bank Trust Company, National Association, serving as trustee.
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