Chimera Investment said it would offer 100 million shares of common stock at $3.65 per share, below Tuesday's closing price of $3.82. Underwriters were granted a 30-day option to purchase up to an additional 15 million shares solely to cover overallotments.
Chimera said proceeds will be used to finance the acquisition of residential mortgage-backed securities (RMBS) not guaranteed by a U.S. government agency, RMBS guaranteed by a U.S. government agency, prime and Alt-A mortgage loans, commercial mortgage loans, commercial mortgage-backed securities, collateralized debt obligations, and other consumer or non-consumer asset-backed securities.
Shares of Chimera were down 13 cents, or 3.4%, to $3.69. In a research note early Wednesday, Keefe Bruyette & Woods analysts reiterated their outperform rating on Chimera shares, arguing that the transaction is likely to be have little impact on book value and earnings and that "any weakness in the shares related to this offering could present a buying opportunity."Elsewhere, PPL Corp. (PPL) shares rose after the energy and utility company priced an offering of 90 million shares of common stock at $24 per share. Proceeds from the offering will be use to fund a portion of the purchase price of the company's recently announced acquisition of E.ON U.S., the parent company of Louisville Gas and Electric Company and Kentucky Utilities Company. PPL Corp. shares were up 2.9% to $24.94. Royal Gold (RGLD) priced an offering of 5.2 million shares of common stock at $48.50 per share, a discount of 5.4% to Tuesday's closing price. Underwriters have a 30-day option to purchase up to 780,000 additional shares of common stock to cover overallotments, if any. Royal Gold said proceeds will be used to pay down debt, fund acquisitions and for other purposes. Royal Gold shares were down 4.8% to $48.82. Meanwhile, Heritage-Crystal Clean (HCCI) said underwriters for its public offering of 3 million shares of common stock have purchased an additional 450,000 shares as part of the option granted to them. Shares were down 0.9% to $8.08.
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