Invesco Mortgage Capital (IVR) is tapping the stock market for a new round of fundraising. The mortgage real estate investment trust (mREIT) announced on Tuesday that it has priced an upcoming secondary common-stock issue at $3.83 per share.
The company will sell 24 million shares in the flotation, so if it goes according to plan, Invesco stands to raise $91.9 million in gross proceeds. Originally, it planned to issue only 22 million shares.
In addition to those 24 million shares, the mREIT has granted the issue's underwriters a 30-day option to buy up to an extra 3.6 million shares.
In its announcement, Invesco said it intends to use the net proceeds "to purchase assets within its target asset classes, subject to its investment guidelines, and to the extent consistent with maintaining its REIT qualification, and for other general corporate purposes." It didn't get any more specific.
In contrast to equity REITs, which own and manage property directly, mREITs like Invesco hold the mortgages that finance real estate. The mREIT universe was shaken badly by the coronavirus pandemic last year, and mREITs in general (and Invesco specifically) have since been in recovery mode.
After selling off assets and slashing its dividend, a slimmed-down Invesco continued to shore up its business. The new stock flotation should help it continue to get back on its feet.
The company said the issue should close on Thursday, Feb. 4. Since it is somewhat dilutive (Invesco currently has nearly 181.4 million shares outstanding), investors aren't too happy about it. The company's stock closed 4.2% lower on Tuesday.