Terms

Series

Series B Fixed-Rate Reset Cumulative Redeemable Preferred Stock

Liquidation Preference

$25.00

Rate Type

Fixed To Floating

Payment Frequency

Quarterly

Cumulative

Yes

Perpetual

Yes

Convertible

Yes

Callable

Yes

First Call Date

January 30, 2027

First Call Price

$25.00

Capital Stack Ranking

Junior To: All Existing And Future Indebtedness, Any Future Senior Stock, All Liabilities And Preferred Equity Of Subsidiaries; Pari Passu With: Series A Fixed-To-Floating Rate Cumulative Redeemable Preferred Stock, Any Future Parity Stock; Senior To: Common Stock, Junior Stock (Any Future Junior Preferred Classes)

Regulatory (Basel III) Call

No

Tax Classification

Reit Passthrough

Qualifies for QDI

No

Qualifies for DRD

No

Prospectus Summary

Ellington Financial Inc. (NYSE: EFC), a REIT that invests in mortgage-related and other financial assets, is offering Series B Fixed-Rate Reset Cumulative Redeemable Preferred Stock with a $25.00 liquidation preference and $0.001 par value. The coupon rate was not finalized at the time of this preliminary filing; the stock pays a fixed rate through January 30, 2027, then resets every five years to the prevailing 5-year U.S. Treasury rate plus a fixed spread. The Series B is cumulative, meaning any skipped or deferred dividends accumulate and must be paid in full before any distributions can be made on common stock or junior securities. The first call date is January 30, 2027, at par ($25.00 per share). The Series B Preferred Stock sits above common stock and all junior preferred classes, and ranks on parity with Ellington Financial's existing Series A Preferred Stock. It is junior to all existing and future indebtedness and other liabilities of the issuer—as of September 30, 2021, the company and its subsidiaries had approximately $3.3 billion of senior obligations. Critically, as a holding company issue, the Series B is structurally subordinated to all indebtedness and preferred equity of operating subsidiaries, which have no obligation to upstream funds for preferred dividends. There is no bank-style regulatory capital call; instead, the issuer retains the right to redeem shares early only to preserve REIT qualification or upon a Change of Control (within 120 days of the event at $25.00 plus accrued dividends). Certain debt covenants may also restrict dividend payments. Dividends are payable quarterly in arrears on or about January 30, April 30, July 30, and October 30 each year. The first payment date is January 30, 2022 (short first period), with an initial record date on or about December 30, 2021. Because Ellington Financial is a REIT, dividends are generally characterized as ordinary income or REIT pass-through distributions rather than qualified dividend income (QDI), so investors should not expect the 15%/20% preferential federal tax rate or the corporate dividends-received deduction (DRD) to apply. Investors should consult the accompanying prospectus's 'Material U.S. Federal Income Tax Considerations' section for full details on tax treatment.

Summarized from the SEC prospectus filing.

Distribution History

Floating Rate Terms

Conversion Terms

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

As a cumulative preferred, missed dividends accumulate and must be paid in full before any dividends can be paid on common stock or junior securities; additionally, certain debt covenants may restrict dividend payments on the Series B Preferred Stock.

Other Preferreds from Ellington Financial Inc.

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 54 (Average)