Terms

Series

% Series C Fixed-to-Floating Rate 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

March 31, 2025

First Call Price

$25.00

Capital Stack Ranking

Junior To: All Existing And Future Indebtedness Of Mfa Financial, Inc., Indebtedness Of Existing And Future Subsidiaries, Any Future Senior Stock; Pari Passu With: 7.50% Series B Cumulative Redeemable Preferred Stock, Any Other Parity Stock; Senior To: Common Stock, Junior Stock (Any Future Stock Ranking Junior To Series C)

Regulatory (Basel III) Call

No

Tax Classification

Reit Passthrough

Qualifies for QDI

No

Qualifies for DRD

No

Prospectus Summary

MFA Financial, Inc., a Maryland-based internally-managed mortgage REIT, is offering its Series C Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock with a $25.00 liquidation preference and $0.01 par value. The stock pays a fixed coupon (rate to be set at pricing) through March 30, 2025, then converts to a floating rate of three-month LIBOR plus a stated spread, paid quarterly on the last day of March, June, September, and December. The first call date is March 31, 2025, at $25.00 per share. Critically, the Series C is cumulative — missed dividends accumulate and must be paid in full before any distributions can be made on junior securities, providing meaningful downside protection for income investors relative to non-cumulative structures. The Series C Preferred Stock sits above common stock and any future Junior Stock, and ranks on parity with the existing 7.50% Series B Cumulative Redeemable Preferred Stock. However, it is effectively junior to all of MFA Financial's existing and future indebtedness — approximately $1.044 billion at December 31, 2019 — and to the indebtedness of all subsidiaries, which have no obligation to upstream funds to service preferred dividends at the holding company level (structural subordination). There is no bank regulatory Tier 1 capital call; however, MFA may redeem the preferred prior to March 31, 2025 if required to preserve its REIT tax status. A Change of Control special redemption right allows MFA to call the stock within 120 days of a qualifying control event. The effective yield at par will be determined at pricing. As a REIT issuer, MFA's preferred dividends are generally classified as ordinary income (not qualified dividend income eligible for the 15%/20% preferential rate, and not eligible for the corporate dividends-received deduction), though investors should consult the full tax disclosure in the accompanying prospectus. Dividends are payable quarterly on the last day of March, June, September, and December, with record dates fixed by the board. After six consecutive or non-consecutive missed quarterly dividend periods, holders gain the right to elect two additional board directors — the primary enforcement mechanism — but no explicit dividend stopper blocking payments on junior securities is cited in the excerpted text.

Summarized from the SEC prospectus filing.

Distribution History

Floating Rate Terms

Conversion Terms

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

While the prospectus does not include an explicit dividend stopper clause in the excerpted text, the Series C Preferred Stock is cumulative and ranks senior to common stock and Junior Stock; arrearages trigger voting rights (two additional directors) after six missed quarterly periods.

Other Preferreds from MFA Financial Inc

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 42 (Average)