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Western Asset Mortgage closes senior notes offering

Western Asset Mortgage Capital Corp. completed the issuance and sale of $100.0 million aggregate principal amount of its 6.75% convertible senior notes due Oct. 1, 2022.

The notes will pay interest semiannually in arrears on April 1 and Oct. 1 of each year, starting April 1, 2018.

From time to time, the company may redeem the notes on or after July 1, 2022, for cash, in whole or in part, at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest thereon to, but excluding, the redemption date. Prior to that date, the notes will be convertible only in certain circumstances and during certain periods. The conversion rate is initially 83.1947 common shares per $1,000 principal amount of notes, which is equal to an initial conversion price of about $12.02 per common share.

The company also granted the underwriter a 30-day option to purchase up to an additional $15 million in notes to cover overallotments.

The net proceeds to the company from the sale of the notes, after deducting the underwriters' discounts and commissions and estimated offering expenses, are expected to be about $96.6 million, or about $111.2 million if the underwriter's overallotment option was exercised in full. Western Asset Mortgage intends to use the net proceeds of the offering to make investments relating to its business.

JMP Securities LLC is serving as sole book-running manager for the offering.