Tuesday, March 13, 2012

MTGE Announces Offering Up To 11.5m Shares

In an offering that could more than double MTGE's shares outstanding at a post-ex-date price that is nearly a dollar north of then-likely NAV, American Capital Mortgage Agency has announced its intention to sell shares under its registration mentioned by the Jaded Consumer at Seeking Alpha. The updated proposed price of the latest 1.5m share registration is $21.86, though the price is "[e]stimated solely for purposes of calculating the registration fee" rather than posing a hard limit. The recent registrations and amended registrations combine to over 11.5m shares.

MTGE's wild price range – recently past $24 – makes an ultimate issuance price hard to pin down. However, MTGE's last-published NAV was less than $21 and its last-quarter NAV increase was nearly a dollar per share – increasing shareholders' value per share 91¢ after paying an 80¢ dividend. With a 90¢ dividend about to go ex-, MTGE's NAV would be near $22.68 near quarter-end if its results were (other than the dividend increase) exactly the same this quarter as last quarter. Of course, MTGE's performance would have to decline to return the exact same result as last quarter, as it began the quarter with more invested capital this quarter than it did last quarter.

Today's close of $22.47 doesn't leave much room for above-NAV issuance if buyers are to receive a discount to market. When is this issuance, exactly?

No comments: