Cherry Hill Mortgage Investment Corporation Authorizes Preferred Stock Repurchase Program
Cherry Hill Mortgage Investment Corporation (NYSE: CHMI) authorized a $50 million repurchase of its preferred stock, including its 8.20% Series A Cumulative Redeemable Preferred Stock and its 8.250% Series B Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock. The repurchase will be conducted through open market or privately negotiated transactions, subject to market conditions and SEC rules.
The authorization by Cherry Hill Mortgage Investment Corporation to repurchase up to $50 million of its preferred stock is a strategic financial decision that can have multiple implications for the company's capital structure and shareholder value. Share buybacks often signal management's confidence in the company's financial health and future prospects, potentially leading to a positive market reaction.
From a financial perspective, the repurchase of preferred shares can lead to a reduction in the company's cost of capital, as preferred stock typically carries a higher dividend obligation compared to debt. This could improve earnings per share (EPS) over time by reducing the number of shares outstanding. However, it is important to note that the execution of this buyback plan is contingent on market conditions and may be adjusted accordingly.
Investors and stakeholders should monitor the company's buyback activity as it can affect liquidity and leverage ratios. Although the buyback has no set expiration, the lack of a definitive timeline adds an element of uncertainty. The impact on the stock price will depend on how the market interprets this move in conjunction with the company's overall performance and macroeconomic factors.
In the context of the real estate investment trust (REIT) industry, Cherry Hill Mortgage Investment Corporation's decision to repurchase preferred stock underscores a commitment to managing its equity structure proactively. Repurchase programs are common among REITs seeking to optimize their balance sheets, particularly when shares are perceived to be undervalued.
An industry analysis would compare this repurchase size and terms with those of peer companies to assess its competitiveness. It is also essential to evaluate the company's liquidity and debt levels, as these buybacks should not compromise the firm's ability to invest in growth opportunities or meet its financial obligations.
Stakeholders should consider the potential impact on the company's dividend policy, as preferred stock dividends are typically a fixed expense. By reducing the number of preferred shares, the company may have more flexibility in managing its cash flow and dividend payouts to common shareholders.
12/19/2023 - 08:30 AM
FARMINGDALE, N.J. --(BUSINESS WIRE)--
Cherry Hill Mortgage Investment Corporation (NYSE: CHMI) today announced that its Board of Directors has authorized the repurchase of up to $50 million 8.20% Series A Cumulative Redeemable Preferred Stock and its 8.250% Series B Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock.
The shares are expected to be repurchased from time to time through open market or privately negotiated transactions, including pursuant to trading plans in accordance with Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended, or by any combination of such methods. The manner, price, number and timing of share repurchases will be subject to a variety of factors, including market conditions and applicable U.S. Securities and Exchange Commission rules. The authorization does not have an expiration date and repurchases may be commenced or suspended at any time without prior notice.
About Cherry Hill Mortgage Investment Corporation
Cherry Hill Mortgage Investment Corporation is a real estate finance company that acquires, invests in and manages residential mortgage assets in the United States . For additional information, visit www.chmireit.com .
Forward-Looking Statements
This press release contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws, including, among others, statements relating to the repurchase of the Company’s preferred stock. These forward-looking statements are based upon the Company’s present expectations, but these statements are not guaranteed to occur. For a description of factors that may cause the Company's actual results or performance to differ from its forward-looking statements, please review the information under the heading “Risk Factors” included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022, and other documents filed by the Company with the Securities and Exchange Commission.
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Investor Relations
InvestorRelations@CHMIreit.com
Source: Cherry Hill Mortgage Investment Corporation
What did Cherry Hill Mortgage Investment Corporation (NYSE: CHMI) announce?
Cherry Hill Mortgage Investment Corporation announced the authorization of a $50 million repurchase of its preferred stock.
What type of stock will be repurchased by Cherry Hill Mortgage Investment Corporation (NYSE: CHMI)?
The repurchase includes the 8.20% Series A Cumulative Redeemable Preferred Stock and the 8.250% Series B Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock.
How will the repurchase be conducted by Cherry Hill Mortgage Investment Corporation (NYSE: CHMI)?
The repurchase will be conducted through open market or privately negotiated transactions, subject to market conditions and SEC rules.
What factors will determine the manner, price, number, and timing of share repurchases by Cherry Hill Mortgage Investment Corporation (NYSE: CHMI)?
The manner, price, number, and timing of share repurchases will be subject to a variety of factors, including market conditions and applicable U.S. Securities and Exchange Commission rules.
Does the authorization for repurchases by Cherry Hill Mortgage Investment Corporation (NYSE: CHMI) have an expiration date?
The authorization does not have an expiration date and repurchases may be commenced or suspended at any time without prior notice.
