EFC Raises $400M with 7.375% Senior Notes to Fund Asset Purchases

Rhea-AI Filing Summary

Ellington Financial Inc. announced the pricing of a $400 million offering of 7.375% senior unsecured notes due 2030 through certain subsidiaries, with expected closing on October 6, 2025, subject to customary conditions. The company plans to use net proceeds for general corporate purposes, including repaying part of borrowings under its repurchase agreements and funding purchases of additional assets aligned with its investment objectives.

The Notes were offered only to qualified institutional buyers under Rule 144A and to non-U.S. persons pursuant to Regulation S and are not registered under the Securities Act. A press release dated September 30, 2025, is furnished as Exhibit 99.1.

Positive

• $400 million in term financing increases liquidity and reduces reliance on short-term repurchase agreements
• Proceeds earmarked for repaying repo borrowings and funding additional asset purchases, supporting the company’s investment strategy
• Issuance matures in 2030, providing multi-year funding stability

Negative

• The 7.375% coupon represents a relatively high fixed interest cost that may pressure net interest margin
• Notes are not registered and were offered under Rule 144A/Reg S, which limits immediate retail market liquidity
• Unsecured status means notes rank behind secured creditors in a liquidation scenario

Insights

Financial Analyst

TL;DR Issuance raises $400M of long-term funding to refinance short-term repo borrowings and support asset growth, at a relatively high coupon.

This financing provides Ellington Financial with committed term capital through 2030, reducing near-term refinancing risk tied to repurchase agreements and enabling continued asset purchases that support the REIT's investment strategy. The 7.375% coupon is relatively expensive versus historical corporate yields, implying higher fixed interest expense that will affect net income and spread dynamics unless offset by higher-yielding assets. The use of Rule 144A/Reg S limits immediate retail liquidity of the notes.

Debt Capital Markets Specialist

TL;DR A $400M senior unsecured 2030 issuance secures multi-year funding but carries elevated coupon and limited distribution due to private placement channels.

The transaction locks in term financing to October 2030, which should improve funding stability compared with short-dated repo lines. From a markets perspective, offering to QIBs and non-U.S. investors via Rule 144A and Regulation S is standard for institutional distribution but may limit secondary market breadth. Investors should note the unsecured senior status and the coupon level as key determinants of cost of capital and potential refinancing economics.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): September 30, 2025

ELLINGTON FINANCIAL INC.

(Exact name of registrant as specified in its charter)

Delaware

001-34569

26-0489289

(State or other jurisdiction of incorporation)

(Commission File Number)

(IRS Employer Identification No.)

53 Forest Avenue

Old Greenwich, CT 06870

(Address and zip code of principal executive offices)

Registrant's telephone number, including area code: (203) 698-1200

Not Applicable

(Former Name or Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol(s)

Name of Each Exchange on Which Registered

Common Stock, $0.001 par value per share

EFC

The New York Stock Exchange

6.750% Series A Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock

EFC PR A

The New York Stock Exchange

6.250% Series B Fixed-Rate Reset Cumulative Redeemable Preferred Stock

EFC PR B

The New York Stock Exchange

8.625% Series C Fixed-Rate Reset Cumulative Redeemable Preferred Stock

EFC PR C

The New York Stock Exchange

7.00% Series D Cumulative Perpetual Redeemable Preferred Stock

EFC PRD

The New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company    ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     ¨

Item 8.01.    Other Events

On September 30, 2025, Ellington Financial Inc. (the "Company") issued a press release announcing the pricing of an offering of $400 million in aggregate principal amount of 7.375% senior unsecured notes due 2030 (the “Notes” and, such offering, the “Senior Notes Offering”) through certain of its subsidiaries. The Senior Notes Offering is expected to close on October 6, 2025, subject to customary closing conditions. A copy of the Company’s press release with respect to the Senior Notes Offering is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated in this Item 8.01 by reference.

The Company expects to use the net proceeds from the Senior Notes Offering for general corporate purposes, including repaying a portion of the borrowings under the Company’s outstanding repurchase agreements and funding purchases of additional assets in accordance with its investment objectives and strategies.

The Notes have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any other jurisdiction, and unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and the securities laws of any other applicable jurisdiction. The Notes have been offered only to persons reasonably believed to be qualified institutional buyers under Rule 144A under the Securities Act and to non-U.S. persons outside the United States in reliance on Regulation S under the Securities Act.

This report is neither an offer to sell nor a solicitation of an offer to buy the Notes or any other securities and shall not constitute an offer to sell or a solicitation of an offer to buy, or a sale of, the Notes or any other securities in any jurisdiction in which such offer, solicitation or sale is unlawful.

Item 9.01    Financial Statements and Exhibits.

(d) Exhibits. The following exhibit is being furnished herewith this Current Report on Form 8-K.

99.1   Press release dated September 30, 2025

104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

ELLINGTON FINANCIAL INC.

Date:

September 30, 2025

By:

/s/ JR Herlihy

JR Herlihy

Chief Financial Officer

FAQ

What did Ellington Financial (EFC) announce in the 8-K?

The company priced a $400 million offering of 7.375% senior unsecured notes due 2030, expected to close on October 6, 2025, subject to customary conditions.

How will EFC use the proceeds from the notes offering?

Net proceeds are expected to be used for general corporate purposes, including repaying a portion of borrowings under repurchase agreements and funding purchases of additional assets.

Who were the Notes offered to and are they registered?

The Notes were offered only to persons reasonably believed to be qualified institutional buyers (Rule 144A) and to non-U.S. persons outside the U.S. under Regulation S; they are not registered under the Securities Act.

When is the expected closing date for the Senior Notes Offering?

The Senior Notes Offering is expected to close on October 6, 2025, subject to customary closing conditions.

Where can I find the company’s press release about the offering?

A press release dated September 30, 2025 is furnished as Exhibit 99.1 to the Current Report.