NEW YORK, Jan. 15, 2019 /PRNewswire/ — Hunt Companies Finance Trust, Inc. (NYSE:HCFT) today announced that it will redeem all outstanding shares of its 8.75% Series A Cumulative Redeemable Preferred Stock (NYSE: HCFT PR A) (CUSIP: 44558T209) (the “Series A Preferred Stock”) and that it has entered into a $40.25 million delayed draw credit facility which will mature on February 14, 2025. The new $40.25 million delayed draw credit facility bears interest at an initial fixed rate of 7.25%, which is subject to step up after year 5.
The redemption will occur on February 14, 2019 (the “Redemption Date”) and holders of shares of our Series A Preferred Stock will receive a redemption price equal to $25 per share, plus accumulated and unpaid dividends thereon to, but not including, the redemption date. HCFT will use the proceeds of the loans under the credit facility to fund the redemption of its Series A Preferred Stock.
The redemption is being made pursuant to Section 6(b) of Article First of that certain Articles Supplementary of the Series A Preferred Stock. From and after the Redemption Date, dividends on the Series A Preferred Stock will cease to accrue, the Series A Preferred Stock will no longer be outstanding and, therefore, all rights of the holders of such shares shall terminate except for the right of the holders to receive the cash payable upon the redemption. Upon redemption, the Series A Preferred Stock will be delisted from trading on the New York Stock Exchange.
All shares of the Series A Preferred Stock are held in book-entry form through the Depository Trust Company (“DTC”). Payment to DTC for the redeemed shares of Series A Preferred Stock plus accumulated and unpaid dividends thereon will be made by American Stock Transfer & Trust Company, LLC, as redemption agent.
James Flynn, Chief Executive Officer of Hunt Companies Finance Trust, said “The redemption of HCFT’s Redeemable Preferred Stock and simultaneous replacement with 7.25% fixed-rate debt represents a significant positive step towards increasing the earnings profile and institutional caliber of HCFT. Going forward, we expect the more attractive cost of capital to benefit core earnings to common shareholders annually by approximately $1 million.”
Hunt Companies Finance Trust
Hunt Companies Finance Trust is a real estate investment trust focused with its subsidiaries on investing in, financing and managing transitional multifamily and commercial real estate loans, securities backed by multifamily mortgage loans or multifamily mortgage-backed securities, and other mortgage-related investment including mortgage servicing rights. The Company’s objective remains to deliver attractive cash flow returns over time to its investors.
Hunt Companies Finance Trust is externally managed and advised by Hunt Investment Management, LLC. More information regarding Hunt Investment Management is described in its brochure (Part 2A of Form ADV) available at www.adviserinfo.sec.gov.
Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of the U.S. securities laws that are subject to risks and uncertainties. These forward-looking statements include information about possible or assumed future results of the Company’s business, financial condition, liquidity, results of operations, plans and objectives. You can identify forward-looking statements by use of words such as “believe,” “expect,” “anticipate,” “estimate,” “plan,” “continue,” “intend,” “should,” “may” or similar expressions or other comparable terms, or by discussions of strategy, plans or intentions. Statements regarding the following subjects, among others, may be forward-looking: the redemption of the Series A Preferred Stock, the new delayed draw credit facility, the return on equity; the yield on investments; the ability to borrow to finance assets; and risks associated with investing in real estate assets, including changes in business conditions, interest rates, the general economy and political conditions and related matters. Forward-looking statements are based on the Company’s beliefs, assumptions and expectations of its future performance, taking into account all information currently available to the Company. Actual results may differ from expectations, estimates and projections and, consequently, you should not rely on these forward-looking statements as predictions of future events. Forward-looking statements are subject to substantial risks and uncertainties, many of which are difficult to predict and are generally beyond the Company’s control. Additional information concerning these and other risk factors is contained in the Company’s most recent filings with the Securities and Exchange Commission, which are available on the Securities and Exchange Commission’s website at www.sec.gov.
All subsequent written and oral forward-looking statements that the Company makes, or that are attributable to the Company, are expressly qualified in their entirety by this cautionary notice. Any forward-looking statement speaks only as of the date on which it is made. Except as required by law, the Company is not obligated to, and does not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.