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Western Asset Mortgage Capital offering convertible senior notes

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Western Asset Mortgage Capital offering convertible senior notes

Western Asset Mortgage Capital Corp. is commencing an underwritten offering of its 6.75% convertible senior notes due 2022.

The notes will be a further issuance of, be fully fungible with, and rank equally in right of payment with and form a single series with the $115 million of notes issued in October 2017 and the $40 million of notes issued in August. The reopened notes will pay interest semiannually and are expected to mature Oct. 1, 2022, unless earlier converted, redeemed or repurchased.

Western Asset Mortgage Capital will have the right to redeem the notes on or after July 1, 2022. Before July 1, 2022, the notes will be convertible only upon certain circumstances and during certain periods, and thereafter will be convertible at any time before the close of business on the business day immediately preceding the maturity date. The notes will be convertible into cash, shares of the company's common stock or a combination thereof, at Western Asset Mortgage Capital's sole election.

The company plans to use the net proceeds from the offering primarily for general corporate purposes, including to opportunistically invest in credit sensitive investments consisting of residential whole loans, commercial loans and non-agency commercial mortgage-backed securities. The exact investment of the proceeds will depend on prevailing market and investment conditions at the time its manager, Western Asset Management Co. LLC, invests the net proceeds.

JMP Securities LLC is serving as the sole underwriter for the offering.