Invesco Mortgage Capital Inc. (NYSE:IVR), a real estate investment trust with a market capitalization of $501 million, announced the termination of a material definitive agreement and changes to its capital structure, based on a press release statement.
According to InvestingPro data, the company maintains an impressive 19.37% dividend yield and has consistently paid dividends for 16 consecutive years. The company terminated its Equity Distribution Agreement, effective today, which was initially established on March 19, 2019.
This agreement involved the potential sale of various series of preferred stock through JonesTrading Institutional Services LLC, but no shares were sold under this arrangement.
Concurrently, Invesco Mortgage Capital has redeemed all outstanding shares of its 7.75% Fixed-to-Floating Series B Cumulative Redeemable Preferred Stock at $25.00 per share plus accrued dividends up to but excluding today's date. This redemption was financed through the company's available funds.
Following the redemption, the company's board of directors approved the reclassification of all authorized but unissued shares of Series B Preferred Stock as shares of Preferred Stock without designation as to class or series. Trading at $8.23 per share with a price-to-book ratio of 0.86, InvestingPro analysis suggests the stock is currently slightly undervalued.
Discover more insights about IVR and 1,400+ other stocks through comprehensive Pro Research Reports, available exclusively to InvestingPro subscribers. This change was formalized with the filing of Articles Supplementary with the Maryland State Department of Assessments and Taxation on today's date.
The termination of the Equity Distribution Agreement and the redemption and reclassification of preferred stock reflect strategic adjustments in Invesco Mortgage Capital's financial management. These actions are consistent with the company's broader efforts to optimize its capital structure.
The company has not disclosed any termination penalties in connection with the ending of the Equity Distribution Agreement and has stated that the redemption of the Series B Preferred Stock will not affect its common stock, which continues to be listed and traded on the New York Stock Exchange.
This news comes as part of the company's ongoing adjustments to its financial and capital strategy, aimed at aligning its operations with current market conditions and future growth prospects.
InvestingPro subscribers have access to additional key metrics and analysis tools that help evaluate the effectiveness of such strategic moves, including real-time Fair Value calculations and financial health scores.
In other recent news, Invesco Mortgage Capital has been active with its financial developments. The company has filed a prospectus supplement with the SEC for a potential sale of up to 18 million shares of its common stock, as part of an ongoing at-the-market equity offering program.
This move follows the company's announcement of its third-quarter 2024 financial results, which highlighted a 1.1% increase in book value per common share, reaching $9.37, despite a decrease in estimated book value due to rising treasury yields and interest rate volatility.
Simultaneously, earnings available for distribution per common share decreased to $0.68 from $0.86 in the previous quarter. Invesco Mortgage Capital's investment portfolio was valued at $5.9 billion, primarily in Agency Mortgages and Agency CMBS. In connection with the company's participation in The Citizens JMP Financial Services Conference, it disclosed an estimated book value per common share ranging between $8.98 and $9.34.
These recent developments highlight Invesco Mortgage Capital's ongoing financial maneuvers. The company plans to redeem its Series B preferred shares to improve its capital structure while maintaining a strong liquidity position with $520 million in unrestricted cash.
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