Chimera Investment Corporation (NYSE: CIM) has filed with the SEC to raise up to $345,000,000 in new capital via the sale of common stock. Concurrent with this offering, the company will sell shares of common stock to Annaly Capital Management, Inc. (NYSE: NLY) in a private offering at the same price per share as the price per share of this public offering. It does note the limitations of a 9.8% stake maximum percentage ownership under the REIT qualifications. This was the entity that we referred to as "Annaly’s vulture entity" when it was coming public.
Chimera is listing Credit Suisse and Merrill Lynch as the lead underwriters. Others in the syndicate are listed as Deutsche Bank, JPMorgan, Citi, and UBS.
It plans to use the net proceeds of this offering to finance the acquisition of additional prime and Alt-A mortgage loans, non-Agency RMBS, Agency RMBS and ABS, CDOs, CMBS and other consumer or non-consumer ABS. It may also use the proceeds for other general corporate purposes such as repayment of outstanding indebtedness, working capital, and for liquidity needs.
As Chimera has only been public for about 6 or 7 months and as the stock has been hit hard over its assets it previously purchased, the reaction is not a solid one today. Shares are down 5.6% at $12.20 after 30 minutes of trading, and its post-IPO trading range is $10.59 to $19.79.
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Jon C. Ogg
June 4, 2008
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