Terms

Series

8.00% Series B Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock

Liquidation Preference

$25.00

Coupon Rate

8%

Rate Type

Fixed To Floating

Annual Dividend

$2.00

Payment Frequency

Quarterly

Cumulative

Yes

Perpetual

Yes

Convertible

Yes

Callable

Yes

First Call Date

March 30, 2024

First Call Price

$25.00

Capital Stack Ranking

Junior To: All Existing And Future Indebtedness Of Chimera Investment Corporation, Indebtedness Of Subsidiaries, Any Senior Stock That May Be Issued In The Future; Pari Passu With: Series A 8.00% Cumulative Redeemable Preferred Stock, Any Other Parity Stock; Senior To: Common Stock, Any Junior Stock

Regulatory (Basel III) Call

No

Tax Classification

Reit Passthrough

Qualifies for QDI

No

Qualifies for DRD

No

Shares Offered

12,000,000

Prospectus Summary

Chimera Investment Corporation (NYSE: CIM), a publicly traded mortgage REIT, is offering 12,000,000 shares of its 8.00% Series B Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock at a $25.00 liquidation preference. From issuance through March 29, 2024, the stock pays a fixed 8.00% per annum ($2.00/share annually, $0.50/share quarterly); from March 30, 2024 onward, the rate converts to 3-month LIBOR plus 5.791%. The first call date is March 30, 2024 at $25.00 per share. This is a cumulative preferred, meaning any unpaid dividends accumulate and must be paid in full before Chimera can resume dividends on common or junior stock — providing holders with an important backstop against dividend interruption. The Series B Preferred ranks senior to Chimera's common stock and any future junior stock, and on parity with the existing 8.00% Series A Cumulative Redeemable Preferred Stock. However, it is effectively junior to all existing and future debt obligations of Chimera and, critically, to all liabilities of Chimera's operating subsidiaries — reflecting meaningful structural subordination since Chimera's mortgage assets are held at the subsidiary level. There is no bank regulatory capital (Tier 1) call provision, as Chimera is a REIT rather than a bank holding company. A special optional redemption right allows Chimera to redeem the Series B Preferred within 120 days of a Change of Control at $25.00 plus accrued dividends. At the $25.00 issue price, the fixed-period yield is 8.00% annually, paid quarterly on March 30, June 30, September 30, and December 30, with the first payment on June 30, 2017 ($0.68333/share, covering a long first period). Record dates are set between 10 and 35 days before each payment date. As a REIT, Chimera's dividends are generally not eligible for the qualified dividend income (QDI) preferential 15%/20% tax rate or the corporate dividends-received deduction (DRD); distributions are typically taxed as ordinary income to individual holders. The dividend stopper prevents any common or parity stock dividends from being paid until all accumulated Series B dividends are current, though dividends remain discretionary and subject to board declaration and Maryland law solvency tests.

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 Series B Preferred Stock has any accumulated unpaid dividends for past periods, Chimera is prohibited from paying dividends on or redeeming its common stock, junior stock, or parity preferred (including Series A Preferred Stock) until all past-due Series B dividends are paid or set apart.

Other Preferreds from Chimera Investment Corporation

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 47 (Average)