Terms

Series

8.00% Series B Fixed-to-Floating Rate Cumulative Redeemable Preferred Shares of Beneficial Interest

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

June 15, 2024

First Call Price

$25.00

Capital Stack Ranking

Junior To: All Existing And Future Indebtedness And Other Liabilities Of The Issuer, Indebtedness, Liabilities, And Preferred Equity Of Subsidiaries; Pari Passu With: Series A Preferred Shares (8.125% Series A Fixed-To-Floating Rate Cumulative Redeemable Preferred Shares), Any Future Parity Preferred Shares; Senior To: Common Shares Of Beneficial Interest, All Other Junior Equity Securities

Regulatory (Basel III) Call

No

Tax Classification

Reit Passthrough

Qualifies for QDI

No

Qualifies for DRD

No

Shares Offered

7,000,000

Prospectus Summary

PennyMac Mortgage Investment Trust (NYSE: PMT) is offering 7,000,000 shares of its 8.00% Series B Fixed-to-Floating Rate Cumulative Redeemable Preferred Shares of Beneficial Interest, with a $25.00 liquidation preference per share and a $0.01 par value. The shares pay a fixed 8.00% per annum ($2.00/share annually, $0.50/quarter) through June 14, 2024, then switch to three-month LIBOR plus 5.99% annually on a quarterly basis. The first optional call date is June 15, 2024, at $25.00 per share. These shares are cumulative, meaning any unpaid dividends accrue and must be paid in full before any distributions are made to common shareholders. The Series B Preferred Shares rank senior to PennyMac's common shares and all junior equity securities, and on parity with the existing Series A Preferred Shares ($115 million aggregate liquidation preference). However, they rank effectively junior to all of PennyMac's debt and other liabilities, as well as the indebtedness, liabilities, and preferred equity of its operating subsidiaries — at March 31, 2017, approximately $4.5 billion of senior obligations stood ahead of these shares. As a holding company issue, the preferred shares are structurally subordinated to subsidiary-level obligations, as subsidiaries have no legal obligation to upstream dividends. There is no regulatory capital call provision, as PennyMac is a REIT rather than a bank; however, the shares may be redeemed early to preserve the issuer's REIT qualification. At the $25.00 offering price, the current yield is 8.00% during the fixed-rate period. Dividends are paid quarterly on March 15, June 15, September 15, and December 15, with a record date of the 1st of the payment month. Because PennyMac is a REIT, dividends are generally characterized as ordinary income rather than qualified dividend income (QDI), meaning they typically do not benefit from the 15%/20% preferential tax rate for individual investors, nor the dividends-received deduction (DRD) for corporate holders. Dividend payments may be interrupted if debt covenants prohibit payment or if funds are legally unavailable; if six or more quarterly dividends are missed, preferred holders gain the right to elect two trustees to the board.

Summarized from the SEC prospectus filing.

Distribution History

Floating Rate Terms

Conversion Terms

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If dividends on the Series B Preferred Shares are in arrears, the issuer is restricted from paying dividends on or repurchasing common shares and other junior equity securities until all accumulated and unpaid preferred dividends are paid in full.

Other Preferreds from PennyMac Mortgage Investment Trust

Div Score Breakdown

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