Terms

Series

8.250% Series B Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock

Liquidation Preference

$25.00

Coupon Rate

8.25%

Rate Type

Fixed To Floating

Annual Dividend

$2.06

Payment Frequency

Quarterly

Cumulative

Yes

Perpetual

Yes

Convertible

Yes

Callable

Yes

First Call Date

April 15, 2024

First Call Price

$25.00

Capital Stack Ranking

Junior To: All Existing And Future Indebtedness Of Cherry Hill Mortgage Investment Corporation, Indebtedness Of Existing And Future Subsidiaries, Any Future Senior Stock; Pari Passu With: Series A Preferred Stock (8.20% Cumulative Redeemable), Any Future Parity Stock; Senior To: Common Stock, Any Future Junior Stock

Regulatory (Basel III) Call

No

Tax Classification

Reit Passthrough

Qualifies for QDI

No

Qualifies for DRD

No

Shares Offered

1,800,000

Prospectus Summary

Cherry Hill Mortgage Investment Corporation (NYSE: CHMI), a Maryland-incorporated residential mortgage REIT, is offering 1,800,000 shares of its 8.250% Series B Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock with a $25.00 liquidation preference. The stock pays a fixed 8.250% per annum ($2.0625/share annually, or ~$0.5156/quarter) through April 14, 2024, then converts to a floating rate of 3-month LIBOR plus 563.1 basis points, resetting quarterly. The first call date is April 15, 2024 at $25.00. This security is cumulative, meaning any dividends the board fails to declare accumulate and must be paid in full before the company can resume payments on junior securities. The Series B Preferred Stock ranks senior to CHMI's common stock and any future junior stock, but sits on parity with the existing Series A Preferred Stock (8.20%, ~2.76 million shares outstanding). It is expressly junior to all existing and future indebtedness of the company and its subsidiaries — a meaningful structural subordination risk given CHMI operates through a holding company above its operating partnership. There is no bank regulatory capital (Tier 1) call provision, as CHMI is a REIT, not a bank. However, the company may redeem early to preserve its REIT tax status or upon a Change of Control (within 120 days of occurrence). Upon a Change of Control where common stock is delisted, holders may alternatively convert into common stock, capped at 2.68962 shares per preferred share. At a $25.00 purchase price, the current fixed-period yield is 8.25%. Dividends are paid quarterly on January 15, April 15, July 15, and October 15, with record dates set 10–35 days prior as determined by the board. Because CHMI is a REIT, dividends are generally not eligible for the 15%/20% qualified dividend income (QDI) rate for individual investors, nor the dividends-received deduction (DRD) for corporate holders — they are typically taxed as ordinary income. The dividend stopper provision means that if Series B dividends fall into arrears, CHMI cannot pay dividends on its common stock or repurchase junior shares until all accumulated Series B arrearages are satisfied.

Summarized from the SEC prospectus filing.

Distribution History

Floating Rate Terms

Conversion Terms

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If the company fails to pay all accumulated dividends on the Series B Preferred Stock, it cannot pay dividends on or repurchase its common stock or any other stock ranking junior to the Series B Preferred Stock until all arrearages are paid in full.

Other Preferreds from Cherry Hill Mortgage Investment Corp

Div Score Breakdown

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