Western Asset Mortgage Capital Corporation Announces Pricing Of 6.75% Convertible Senior Notes Due 2022

PASADENA, Calif., Dec. 10, 2019 /PRNewswire/ -- Western Asset Mortgage Capital Corporation (NYSE: WMC) (the "Company") today announced the pricing of its previously announced public offering of 6.75% Convertible Senior Notes due 2022 (the "Reopened Notes") at a price to the public of 101.25% of the principal amount of the Reopened Notes plus accrued and unpaid interest. The Reopened Notes will have aggregate principal amount of $50 million. The offering is expected to close on or about December 12, 2019, subject to satisfaction of customary closing conditions.

The Reopened Notes will be a further issuance of, be fully fungible with, and rank equally in right of payment with and form a single series with the $115 million principal amount of 6.75% Convertible Senior Notes due 2022 issued by the Company in October 2017 (the "Original Notes") and the $40 million principal amount of 6.75% Convertible Senior Notes due 2022 issued by the Company in August 2019 (the "First Reopened Notes" and, together with the Original Notes, the "Existing Notes"). References to "Notes" herein collectively refer to the Reopened Notes and the Existing Notes. The Reopened Notes will have substantially identical terms as the Existing Notes and will have the same CUSIP number as the Existing Notes. The Notes will bear interest at a rate equal to 6.75% per year, payable semiannually and will mature on October 1, 2022, unless earlier converted, redeemed or repurchased. The Company will have the right to redeem the Notes on or after July 1, 2022. Prior to July 1, 2022, the Notes will be convertible only upon certain circumstances and during certain periods, and thereafter will be convertible at any time prior to the close of business on the business day immediately preceding the maturity date of the Notes. The Notes will be convertible into cash, shares of the Company's common stock or a combination thereof, at the Company's sole election. The conversion rate will initially equal 83.1947 shares of common stock per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately $12.02 per share of common stock, representing an approximate 15% premium based on the closing price of the Company's common stock of $10.48 per share on December 9, 2019.

The Company intends to use the net proceeds from the offering primarily for general corporate purposes, including to opportunistically invest in credit sensitive investments consisting of Residential Whole Loans, Commercial Loans and Non-Agency CMBS. The exact investment of the proceeds will depend on prevailing market and investment conditions at the time its manager, Western Asset Management Company, LLC, invests the net proceeds.

JMP Securities is the sole underwriter for the offering.

The offering is being made pursuant to an effective shelf registration statement, including a prospectus and related prospectus supplement, filed by the Company with the Securities and Exchange Commission (the "SEC"). These documents may be obtained for free by visiting the SEC's website at http://www.sec.gov. Alternatively, a copy of the preliminary prospectus supplement and accompanying prospectus related to the offering may be obtained, when available, by contacting JMP Securities LLC, 600 Montgomery Street, 10th Floor, San Francisco, CA 94111, Attention: Prospectus Department, or by calling (212) 906-3523.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities nor will there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.

ABOUT WESTERN ASSET MORTGAGE CAPITAL CORPORATION

Western Asset Mortgage Capital Corporation is a real estate investment trust that invests in, acquires and manages a diverse portfolio of assets consisting of Agency CMBS, Agency RMBS, Non-Agency RMBS, Non-Agency CMBS, ABS, GSE Risk Transfer Securities, Residential Whole and Bridge Loans and Commercial Loans. The Company's investment strategy may change, subject to the Company's stated investment guidelines, and is based on its manager Western Asset Management Company, LLC's perspective of which mix of portfolio assets it believes provide the Company with the best risk-reward opportunities at any given time. The Company is externally managed and advised by Western Asset Management Company, LLC, an investment advisor registered with the SEC and a wholly-owned subsidiary of Legg Mason, Inc.

FORWARD-LOOKING STATEMENTS

Certain items in this press release may constitute forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements relating to the proposed offering and the anticipated use of the net proceeds from the offering. These statements are based on management's current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The Company can give no assurance that its expectations will be attained. Factors that may cause actual results to vary from our forward-looking statements include, but are not limited to, changes in interest rates; changes in the yield curve; changes in prepayment rates; the availability and terms of financing; general economic conditions; market conditions; conditions in the market for mortgage related investments; legislative and regulatory changes that could adversely affect the business of the Company; and other factors, including those set forth in the Risk Factors section of the Company's annual report on Form 10-K for the period ended December 31, 2018 and quarterly reports on Form 10-Q for the fiscal quarters ended March 31, 2019, June 30, 2019 and September 30, 2019, respectively, filed with the SEC. The Company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.

SOURCE Western Asset Mortgage Capital Corporation