Anworth Raises Preferred Conversion Rate

REIT is changing conversion rate because dividend yield on common stock exceeds threshold.

Rich Duprey
Rich Duprey
Jul 9, 2013 at 1:05PM

Externally managed real estate investment trust Anworth Mortgage Asset (NYSE:ANH) announced yesterday that it is increasing the conversion rate on its 6.25% Series B cumulative convertible preferred stock from 3.8695 shares of its common stock to 3.9202 shares effective July 9.

The REIT said it had announced last month it would be paying a dividend of $0.15 per share on its common stock, but in accordance with the terms of its preferred shares, if the annualized yield on that dividend exceeds 6.25%, the conversion rate on the Series B preferred stock is adjusted. The formula used is set in the preferred stock's articles, and as a result of the dividend to be paid on July 29, the conversion rate will change.

The regular dividend payment equates to a $0.60-per-share annual dividend, yielding 12.8% based on the closing price of Anworth Mortgage Asset's stock on July 8.

ANH Dividend Chart

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