Two Harbors offering $250 million convertible notes due 2022; talked at 6% to 6.25%, up 13.51%

By Stephanie N. Rotondo

Seattle, Jan. 12 – Two Harbors Investment Corp. plans to sell $250 million of convertible senior notes due 2022, the company said in a press release on Thursday.

The yield is talked at 6% to 6.25%, according to a market source. The conversion price is slated to be $10 per share, representing a conversion premium of approximately 13.51%.

Credit Suisse Securities (USA) LLC is the sole bookrunner.

There is a $37.5 million over-allotment option.

There are standard change of control, anti-dilution and dividend protections, the source noted.

The issue is non-callable but holders can require a repurchase in certain circumstances.

Conversions will be settled with common stock.

Proceeds will be used to fund the business and investment activities of the company and its subsidiaries, which may include acquisitions, and for general corporate purposes.

Two Harbors is a New York-based real estate investment trust that invests in residential mortgage-backed securities, mortgage servicing rights, commercial real estate and other financial assets.

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