Five Oaks InvestmentCorp. filed a registration statement for the resale from time to timeof up to an aggregate of 6,485,417 common shares and of warrants to purchase 3,125,000common shares by certain selling stockholders.
The 6,485,417 common shares are comprised of 1,656,250 sharesissued in the company's May 2012 pre-IPO private placement, of which 1,562,500 werepurchased by XL Investments Ltd., a unit of XLGroup Plc; 1,666,667 shares purchased by XL Investments concurrentlywith Five Oaks Investment's IPO; 37,500 shares issued under the Five Oaks Investment;and 3,125,000 shares issuable by Five Oaks Investment upon exercise of the warrantsto either the selling stockholders or persons who acquire warrants from the sellingstockholders.
Each warrant is exercisable for one Five Oaks Investment commonshare at an exercise price of $15.75 per share and expires Sept. 29, 2019. The warrantswere issued to XL Investments on Sept. 29, 2012.
Five Oaks Investment will not receive any of the proceeds fromthe sale of the securities being offered and resold by the selling stockholders.However, upon exercise of a warrant, the warrant holder will pay the company theexercise price of $15.75 per share, subject to certain adjustments, according toa Form S-3 filed April 29.
In addition, Oaks Funding II LLC has acquired from Five OaksInvestment certain multifamily mortgage certificate-backed certificates issued byBAMLL Re-REMIC Trust 2014-FRR7 with a certificate principal balance of about $32.1million pursuant to a security sale agreement, dated April 25.
Oaks Funding sold the FRR7 Security to Oaks Re-REMIC Trust 2016-FRR7C,or the FRR7C Trust, pursuant to a certain trust agreement between Oaks Funding andU.S. Bank NA, as trustee.
The FRR7C Trust issued certificates backed by the FRR7C Securityto Oaks Funding, which sold such certificates privately pursuant to a certificatepurchase agreement.
Another Five Oaks Investment unit, Oaks Holding I LLC, purchasedall of the class B certificates issued by the FRR7C Trust. Oaks Holding I is notobligated to hold any of such class B certificates and may sell them at any time.
Five Oaks Investment and Merrill Lynch Pierce Fenner & SmithInc. entered into a mortgage security purchase and sale agreement, dated April 21,under which Merrill Lynch acquired from Five Oaks Investment certain multifamilymortgage-backed securities issued by FREMF 2011-K13 Mortgage Trust with a certificateprincipal balance of about $79.7 million with respect to certain class C certificatesand a certificate notional amount of about $922.0 million with respect to certainclass X2 certificates, or collectively the K13 Securities.
Merrill Lynch then sold the K13 Securities to Banc of AmericaMerrill Lynch Large Loan Inc., who then sold them to BAMLL Re-REMIC Trust 2016-FRR14,or the FRR14 Trust, pursuant to a certain trust agreement, dated April 21, betweenthe Banc of America Merrill Lynch Large Loan and U.S. Bank, as trustee.
The FRR14 Trust issued certificates backed by the K13 Securities,or the FRR14 Certificates, to Banc of America Merrill Lynch Large Loan. Banc ofAmerica Merrill Lynch Large Loan sold the FRR14 Certificates, pursuant to a certificatepurchase agreement, and the certificates were then sold to investors pursuant toan offering circular, dated April 13.
Oaks Holding I purchased all of the class D certificates issuedby the FRR14 Trust. However, Oaks Holding I is not obligated to hold any of suchcertificates and may sell them at any time, according to a Form 8-K filed April29.