Two Harbors issues one preferred for each CYS preferred after merger

By Susanna Moon

Chicago, July 31 – Two Harbors Investment Corp. and CYS Investments Inc. announced the conversion amounts for CYS’s $75 million 7.75% series A cumulative redeemable preferred stock and $200 million 7.5% series B cumulative redeemable preferred stock, which were assumed by Two Harbors as the result of their merger.

After the merger closed, each share of CYS 7.75% preferreds was converted into the right to receive one share of newly classified Two Harbors’ 7.75% series D cumulative redeemable preferred stock and each share of CYS 7.5% series B cumulative redeemable preferred stock was converted into the right to receive one share of newly classified Two Harbors’ 7.5% series E cumulative redeemable preferred stock, according to a notice.

Also, each share of CYS common stock was converted into the right to receive 0.4680 newly issued shares of Two Harbors common stock as well as a cash amount of $0.0965 per share, which resulted in the issue of 72.7 million shares of Two Harbors common stock and $15 million paid in cash to CYS common stockholders in connection with the merger.

The companies said on July 20 that it had set the final exchange ratio for the preferreds with the conversion amounts to be based on the merger closing date.

If the proposed merger were completed after the market close on July 31, as expected, each share of CYS 7.75% series A cumulative redeemable preferred stock would be converted into the right to receive one share of new Two Harbors 7.75% series D cumulative redeemable preferred stock. Each share of CYS 7.5% series B cumulative redeemable preferred stock will be converted into the right to receive one share of new Two Harbors 7.5% series E cumulative redeemable preferred stock.

The newly issued shares of Two Harbors preferred stock will begin trading on the NYSE under the ticker symbols “TWO PRD” and “TWO PRE” on Aug. 1.

As reported in April, Two Harbors, a hybrid mortgage real estate investment trust, entered into a definitive merger agreement to acquire CYS Investments.

CYS is a Waltham, Mass.-based real estate investment trust.

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