Terms

Series

8.125% Series A Fixed-to-Floating Rate Cumulative Redeemable Preferred Shares of Beneficial Interest

Liquidation Preference

$25.00

Coupon Rate

8.125%

Rate Type

Fixed To Floating

Annual Dividend

$2.03

Payment Frequency

Quarterly

Cumulative

Yes

Perpetual

Yes

Convertible

Yes

Callable

Yes

First Call Date

March 15, 2024

First Call Price

$25.00

Capital Stack Ranking

Junior To: All Existing And Future Indebtedness And Other Liabilities Of Pennymac Mortgage Investment Trust, Indebtedness, Other Liabilities, And Preferred Equity Of All Existing And Future Subsidiaries, Any Future Senior Preferred Shares; Pari Passu With: Any Future Parity Preferred Shares With Equal Ranking Terms; Senior To: Common Shares Of Beneficial Interest, Junior Equity Securities

Regulatory (Basel III) Call

No

Tax Classification

Reit Passthrough

Qualifies for QDI

No

Qualifies for DRD

No

Shares Offered

4,600,000

Prospectus Summary

PennyMac Mortgage Investment Trust (NYSE: PMT) is offering 4,600,000 Series A Fixed-to-Floating Rate Cumulative Redeemable Preferred Shares at a $25.00 liquidation preference. The shares pay a fixed 8.125% per annum ($2.03125/share annually) from issuance through March 14, 2024, then switch to three-month LIBOR plus 583 basis points quarterly thereafter. These are not depositary shares — each share is a direct preferred share. Critically, the dividends are cumulative: if PennyMac skips or reduces a payment, unpaid dividends accumulate and must be paid in full before any distribution can be made to common shareholders, providing meaningful downside protection for income investors. The Series A Preferred Shares sit above common equity in the capital stack but are effectively junior to all of PennyMac's existing and future debt and other liabilities — approximately $5.0 billion as of December 31, 2016. Because PennyMac is a holding company, the preferred shares are also structurally subordinated to all indebtedness, liabilities, and preferred equity of its operating subsidiaries, which have no legal obligation to upstream funds. There is no traditional bank regulatory capital call (Tier 1), but the shares may be redeemed before March 15, 2024 if necessary to preserve REIT tax qualification — a relatively narrow REIT-specific trigger rather than a prudential banking regulator trigger. At par, the fixed-period yield is 8.125%, with quarterly payments on March 15, June 15, September 15, and December 15 (first payment June 15, 2017), with record dates on the 1st of each payment month. As a REIT, PennyMac's dividends are generally not eligible for the preferential 15%/20% qualified dividend income (QDI) rate or the corporate dividends-received deduction (DRD); most distributions will be taxed as ordinary income. The dividend stopper is consequential: if full cumulative dividends are in arrears, PennyMac is prohibited from paying any dividends on common shares or junior/parity preferred securities until all accumulated preferred dividends are made whole, aligning management incentives with preferred holders.

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 issuer has not paid full cumulative dividends on the Series A Preferred Shares, it cannot pay dividends on, make distributions on, or redeem/repurchase its common shares or any junior or parity preferred shares.

Other Preferreds from PennyMac Mortgage Investment Trust

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 38 (Weak)