New York Mortgage Trust, Inc. Announces Consent Solicitation Related to Senior Notes due 2026 to Support Strategic Growth

Rhea-AI Summary

New York Mortgage Trust (NYMT) has launched a consent solicitation for holders of its 5.75% Senior Notes due 2026, seeking to amend the indenture to increase the maximum Net Debt to Equity Ratio to 8.00:1.00. The company is offering a consent payment of $4.00 per $1,000 principal amount to noteholders who provide valid consents by June 12, 2025. This amendment aims to support NYMT's growth strategy, which has already shown success with $4.1 billion in asset acquisitions in 2024 and $1.9 billion in Q1 2025, leading to a 55% year-over-year increase in interest income. The company maintains strong liquidity with $173.1 million in cash, $256.8 million in unencumbered securities, and $100.2 million in unencumbered residential loans as of March 31, 2025.

Positive

• 55% year-over-year increase in interest income in Q1 2025
• Strong liquidity position with $530.1 million in combined unencumbered assets and cash
• Successful acquisition of $6 billion in assets since Q2 2023
• Strategic focus on less credit-sensitive assets like Agency RMBS and shorter duration investments

Negative

• Increasing leverage with recourse leverage ratio at 3.4x as of March 31, 2025
• Seeking to increase debt capacity which could lead to higher financial risk
• Additional cost to company for consent payments to noteholders

Insights

REIT Investment Strategist

NYMT seeks to raise debt covenant limits to continue portfolio expansion strategy, showing strong investment growth but increasing leverage.

New York Mortgage Trust is soliciting consent from noteholders to modify its debt covenants, specifically to increase its permitted Net Debt to Equity Ratio from the current limit to 8.00 to 1.00. This amendment would provide NYMT with greater financial flexibility to continue its recent investment expansion strategy.

The company has been actively shifting its portfolio toward less credit-sensitive assets such as Agency RMBS and higher-yielding, shorter-duration investments like business purpose loans. This strategy has driven substantial growth, with $4.1 billion in asset acquisitions during 2024 and an additional $1.9 billion in Q1 2025. These investments have already yielded results, with interest income increasing 55% year-over-year in Q1 2025.

To fund this expansion, NYMT has increased its leverage, particularly in Agency RMBS positions. The company's recourse leverage ratio has risen to 3.4x as of March 31, 2025. While this represents a significant increase in leverage, the company maintains a substantial liquidity position with $173.1 million in available cash, $256.8 million in unencumbered investment securities, and $100.2 million in unencumbered residential loans.

The proposed covenant change is significant for both equity and debt investors. For equity holders, higher leverage could amplify returns in favorable environments but also magnify losses during market downturns. For noteholders, increased leverage raises the risk profile of their investment, which is why the company is offering a modest consent payment of $4.00 per $1,000 in principal.

This strategic shift toward higher leverage and greater focus on Agency RMBS reflects NYMT's adaptation to current market conditions, prioritizing more liquid investments with favorable risk-adjusted returns. However, the substantial increase in the permitted leverage ratio indicates a meaningful change in the company's risk profile that warrants careful consideration by investors.

NEW YORK, June 02, 2025 (GLOBE NEWSWIRE) -- New York Mortgage Trust, Inc. (Nasdaq: NYMT) (“NYMT” or the “Company”) today announced that it is soliciting consents (the “Consent Solicitation”) from holders of its outstanding 5.75% Senior Notes due 2026 (the “Notes”) as of 5:00 p.m. New York City time, on May 30, 2025 (the “Record Date”) to a proposed amendment to the indenture governing such Notes (the “Indenture”). The Consent Solicitation is being made solely upon the terms and conditions described in the Company’s Consent Solicitation Statement, dated June 2, 2025 (the “Consent Solicitation Statement”). The Consent Solicitation will expire at 5:00 p.m., New York City time, on June 12, 2025, unless extended or earlier terminated by the Company (the “Expiration Date”).

Certain details regarding the Notes and the Consent Solicitation are set forth in the table below.

Title of Notes	CUSIP / ISIN Numbers	Aggregate Principal Amount Outstanding (U.S. $)		Consent Payment per U.S. $1,000 Principal Amount of Notes
5.75% Senior Notes due 2026	649604 AG0 / US649604AG06 649604 AE5 / US649604AE57	$100,000,000		$4.00

The Company is soliciting consents (“Consents”) from the holders of the Notes for a proposed amendment to the Indenture to revise the first sentence of Section 1013 of the Indenture to provide that the Company will not permit the Net Debt to Equity Ratio (as defined in the Indenture) as of the last day of each fiscal quarter of the Company to be greater than 8.00 to 1.00 (the “Proposed Amendment”).

The Proposed Amendment is intended to support the continued execution of the Company’s investment strategy, which is focused on generating recurring income. Since the second quarter of 2023, the Company has significantly increased investment activity, targeting assets that are less sensitive to credit deterioration, such as Agency RMBS, and investments with shorter duration and higher yields, such as business purpose loans. This strategy resulted in the acquisition of approximately $4.1 billion in assets during the year ended December 31, 2024, and an additional $1.9 billion in the first quarter of 2025.

These investments delivered strong financial results in the first quarter of 2025, including a 55% year-over-year increase in interest income. To support this expansion in investment activity, the Company utilized efficient, low-cost leverage, particularly in Agency RMBS, increasing its recourse leverage ratio to 3.4x as of March 31, 2025. These assets offer strong liquidity and favorable risk-adjusted returns, making them well-suited to the current market environment.

As of March 31, 2025, the Company maintained a strong liquidity position with $173.1 million in available cash and cash equivalents (excluding Consolidated Real Estate VIEs), $256.8 million in unencumbered investment securities and $100.2 million in unencumbered residential loans.

The Proposed Amendment to the Indenture will enhance the Company’s financial flexibility to continue scaling its portfolio in line with current market opportunities and its income generation objectives. The Company believes that increasing the maximum Net Debt to Equity Ratio is consistent with prudent financial management and is in the best interests of its stakeholders.

Adoption of the Proposed Amendment requires Consents from the holders of a majority of the outstanding aggregate principal amount of the Notes (the “Requisite Consents”). In the event that the Company receives the Requisite Consents on or prior to the Expiration Date, among other conditions, the Company will pay an aggregate cash payment equal to $4.00 per $1,000 principal amount of the Notes for the Consents that are validly delivered and unrevoked (the “Consent Payment”) to the holders who delivered such valid and unrevoked Consents on or prior to the Expiration Date. If the Proposed Amendment becomes operative with respect to the Notes, holders of the Notes that do not deliver valid and unrevoked Consents with respect to their Notes prior to the Expiration Date, or at all, will be bound by the Proposed Amendment. In addition, such holders will not receive the Consent Payment.

The Consent Solicitation is subject to, and conditioned upon, the satisfaction or waiver of certain conditions described in the Consent Solicitation Statement, including the receipt of the Requisite Consents. The Company intends to fund the Consent Solicitation, including fees and expenses payable in connection with the Consent Solicitation, with cash on hand.

Piper Sandler & Co. is acting as Solicitation Agent in connection with the Consent Solicitation. Questions regarding the Consent Solicitation should be directed to the Solicitation Agent by phone at (866) 805‐4128 (toll‐free) or (212) 466‐7807 (collect).

D.F. King & Co., Inc. has been retained to serve as the Information and Tabulation Agent for the Consent Solicitation. Questions or requests for assistance in connection with the Consent Solicitation or the delivery of consents, or for additional copies of the Consent Solicitation Statement, may be directed to the Information and Tabulation Agent by phone, toll free (800) 659-5550 or toll (212) 269-5550, or email at nymt@dfking.com.

Holders may also contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Consent Solicitation.

None of the Company, the Solicitation Agent, the Information and Tabulation Agent, the trustee under the Indenture or any of their respective affiliates is making any recommendation as to whether holders should deliver Consents in response to the Consent Solicitation. Holders must make their own decision as to whether to participate in the Consent Solicitation, and, if so, the principal amount of Notes in respect of which to deliver Consents.

This news release shall not constitute an offer to sell, a solicitation to buy or an offer to purchase or sell any securities. The Consent Solicitation is being made only pursuant to the Consent Solicitation Statement and only in such jurisdictions as is permitted under applicable law. In any jurisdiction in which the Consent Solicitation is required to be made by a licensed broker or dealer, the Consent Solicitation will be deemed to be made on behalf of the Company by the Solicitation Agent, or one or more registered brokers or dealers that are licensed under the laws of such jurisdiction.

About New York Mortgage Trust, Inc.

New York Mortgage Trust, Inc. is a Maryland corporation that has elected to be taxed as a real estate investment trust (“REIT”) for federal income tax purposes. NYMT is an internally managed REIT in the business of acquiring, investing in, financing and managing primarily mortgage-related residential assets.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Forward-looking statements involve numerous risks and uncertainties. The Company’s actual results may differ from the Company’s beliefs, expectations, estimates and projections and, consequently, you should not rely on these forward-looking statements as predictions of future events. Forward-looking statements are not historical in nature and can be identified by words such as “anticipate,” “estimate,” “will,” “should,” “expect,” “believe,” “intend,” “seek,” “plan” and similar expressions or their negative forms, or by references to strategy, plans, or intentions. Forward-looking statements are based on the Company’s beliefs, assumptions and expectations of the Company’s future performance, taking into account information currently available to the Company. Statements regarding the Consent Solicitation, the timing thereof, and the Company’s intention to fund the Consent Solicitation, are forward-looking statements. No assurance can be given that the Consent Solicitation discussed above will be completed on the terms described or at all or that the Company will be able to realize the anticipated benefits of the Consent Solicitation. Completion of the Consent Solicitation on the terms described is subject to numerous possible events, factors and conditions, many of which are beyond the control of the Company and not all of which are known to the Company. These forward-looking statements are subject to risks and uncertainties, including, without limitation, market conditions and those described under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 under “Item 1A. Risk Factors,” the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2025 under “Item 1A. Risk Factors” and on the Consent Solicitation Statement under “Certain Significant Considerations.” Other risks, uncertainties, and factors that could cause actual results to differ materially from those projected may be described from time to time in reports the Company files with the SEC, including reports on Forms 10-Q and 8-K. All forward-looking statements speak only as of the date on which they are made. New risks and uncertainties arise over time, and it is not possible to predict those events or how they may affect the Company. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.

For Further Information

AT THE COMPANY        
Investor Relations
Phone: 212-792-0107
Email: InvestorRelations@nymtrust.com

FAQ

What is NYMT's consent solicitation offering to noteholders?

NYMT is offering $4.00 per $1,000 principal amount to holders of its 5.75% Senior Notes due 2026 who provide valid consents by June 12, 2025.

What change is NYMT seeking to make to its debt covenants?

NYMT wants to amend the indenture to increase the maximum Net Debt to Equity Ratio to 8.00:1.00 to support its strategic growth initiatives.

How much has NYMT's interest income grown in Q1 2025?

NYMT reported a 55% year-over-year increase in interest income for the first quarter of 2025.

What is NYMT's current liquidity position?

As of March 31, 2025, NYMT had $173.1M in cash, $256.8M in unencumbered securities, and $100.2M in unencumbered residential loans.

How much in assets did NYMT acquire recently?

NYMT acquired approximately $4.1 billion in assets during 2024 and an additional $1.9 billion in the first quarter of 2025.