Rithm Capital Corp. Announces $287.5M Preferred Stock Offering

summarizeSummary

This substantial preferred stock offering provides Rithm Capital Corp. with significant capital for its investment strategies and general corporate needs. While preferred stock offerings are dilutive to common shareholders and introduce a fixed dividend obligation, this issuance strengthens the company's capital structure by adding equity that ranks junior to its existing $38.3 billion in indebtedness. The 8.750% fixed-rate reset dividend provides a predictable return for preferred shareholders, and the offering is priced at its $25.00 liquidation preference, which is standard for such instruments.

check_boxKey Events

• Preferred Stock Offering

  Rithm Capital Corp. is offering 10,000,000 shares of 8.750% Series F Fixed-Rate Reset Cumulative Redeemable Preferred Stock, with an underwriters' option for an additional 1,500,000 shares.

• Capital Raise

  The offering is expected to raise up to $287.5 million (including the over-allotment option) for investments and general corporate purposes.

• Dividend Structure

  Dividends are cumulative, payable quarterly, with an initial fixed rate of 8.750% per annum until February 15, 2031, after which the rate will reset based on the five-year treasury rate plus 5.009%.

• Ranking and Redemption

  The Series F Preferred Stock ranks senior to common stock but junior to all existing and future indebtedness. It is redeemable by the company on or after February 15, 2031, or upon a Change of Control.

auto_awesomeAnalysis

This substantial preferred stock offering provides Rithm Capital Corp. with significant capital for its investment strategies and general corporate needs. While preferred stock offerings are dilutive to common shareholders and introduce a fixed dividend obligation, this issuance strengthens the company's capital structure by adding equity that ranks junior to its existing $38.3 billion in indebtedness. The 8.750% fixed-rate reset dividend provides a predictable return for preferred shareholders, and the offering is priced at its $25.00 liquidation preference, which is standard for such instruments.