Terms

Series

8.20% Series A Cumulative Redeemable Preferred Stock

Liquidation Preference

$25.00

Coupon Rate

8.2%

Rate Type

Fixed

Annual Dividend

$2.05

Payment Frequency

Quarterly

Cumulative

Yes

Perpetual

Yes

Convertible

Yes

Callable

Yes

First Call Date

August 17, 2022

First Call Price

$25.00

Redemption Notice Period

30 days

Capital Stack Ranking

Junior To: All Existing And Future Indebtedness Of Cherry Hill Mortgage Investment Corporation, Indebtedness Of Existing And Future Subsidiaries, Senior Stock (Any Future Senior Preferred); Pari Passu With: Parity Stock (Any Future Parity Preferred); Senior To: Common Stock, Junior Stock (Any Future Junior Preferred)

Regulatory (Basel III) Call

No

Tax Classification

Reit Passthrough

Qualifies for QDI

No

Qualifies for DRD

No

Shares Offered

2,200,000

Prospectus Summary

Cherry Hill Mortgage Investment Corporation, a Maryland-chartered residential mortgage REIT externally managed by Cherry Hill Mortgage Management, LLC, is offering 2,200,000 shares of its 8.20% Series A Cumulative Redeemable Preferred Stock at a liquidation preference of $25.00 per share. The fixed 8.20% annual coupon equates to $2.05 per share per year ($0.5125 per quarter), paid on the 15th of January, April, July, and October, with the first payment on October 15, 2017. The stock is cumulative, meaning any missed dividends accrue and must be paid in full before any distributions can be made on common stock. The shares become optionally redeemable by the issuer at $25.00 on or after August 17, 2022. The Series A Preferred Stock sits above common stock in the liquidation waterfall but ranks junior to all of Cherry Hill's existing and future debt obligations and to the debt of its operating subsidiaries. Because Cherry Hill is a holding company that operates through Cherry Hill Operating Partnership, LP, preferred holders face structural subordination — subsidiary-level creditors have prior claims on subsidiary assets before any value flows up to the holding company. There is no bank regulatory capital call; the only early redemption exception prior to 2022 is to preserve REIT tax qualification or, upon a Change of Control, an optional special redemption at $25.00 within 120 days of the triggering event. Holders also receive a contingent conversion right into common stock upon a Change of Control, capped at 2.62881 shares per preferred share. At the $25.00 issue price, the effective yield is 8.20%. As dividends are paid by a REIT, they are generally treated as ordinary income rather than qualified dividend income, meaning they do not benefit from the preferential 15%/20% QDI tax rate available to C-corporation dividends, nor does the dividends-received deduction apply for corporate holders (subject to specific REIT distribution characterization rules). Dividends are payable quarterly on January 15, April 15, July 15, and October 15, to holders of record set 10–35 days before each payment date. The dividend stopper clause prevents Cherry Hill from paying any dividend on common stock or junior/parity preferred stock — or repurchasing such securities — unless full cumulative arrears on the Series A Preferred Stock have been satisfied.

Summarized from the SEC prospectus filing.

Distribution History

Conversion Terms

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If Cherry Hill has not paid full cumulative dividends on the Series A Preferred Stock, it cannot pay dividends on or repurchase its common stock or any other junior or parity preferred stock, until all accumulated arrears on the Series A Preferred Stock are satisfied.

Other Preferreds from Cherry Hill Mortgage Investment Corp

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 41 (Average)