Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
On December 15, 2025, PennyMac Corp. (the “Issuer”), an indirect, wholly-owned subsidiary of PennyMac Mortgage Investment Trust (the “Company”), issued $75 million aggregate principal amount of the Issuer’s 8.500% Exchangeable Senior Notes due 2029 (the “2029 Exchangeable Notes”) in a direct placement registered under the Securities Act of 1933, as amended, pursuant to securities purchase agreements with the respective investors named therein (the “Offering”). As used herein, the term “2029 Exchangeable Notes” includes the Existing Notes (as defined below), unless the context requires otherwise.
The 2029 Exchangeable Notes issued in the Offering were issued as a reopening of, and are part of the same series with, the 8.500% Exchangeable Senior Notes due 2029 that the Company previously issued in May 2024 (the “Existing Notes”). Upon completion of the Offering, the aggregate principal amount of outstanding Notes was $291,500,000.
The 2029 Exchangeable Notes were issued pursuant to an Indenture, dated as of April 30, 2013 (the “Base Indenture”), among the Issuer, the Company and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”), as supplemented by the Fourth Supplemental Indenture, dated as of May 24, 2024 (the “Supplemental Indenture” and, collectively with the Base Indenture, the “Indenture”), among the Issuer, the Company and the Trustee.
The net proceeds from the Offering were approximately $75.5 million, after deducting estimated offering expenses. The net proceeds from the Offering are intended to be used for the repayment of a portion of the borrowings outstanding under the Company’s secured mortgage servicing rights and servicing advance facilities; the repurchase or repayment of a portion of the Issuer’s 5.50% Exchangeable Senior Notes due 2026; and for other general business purposes.
The 2029 Exchangeable Notes will mature on June 1, 2029 unless repurchased or exchanged in accordance with their terms prior to such date. The 2029 Exchangeable Notes bear interest at a rate of 8.500% per year, payable semiannually in arrears on June 1 and December 1 of each year, beginning (in the case of the 2029 Exchangeable Notes issued in the Offering) on June 1, 2026. The 2029 Exchangeable Notes are fully and unconditionally guaranteed by the Company. Upon exchange, the Issuer will pay cash up to the aggregate principal amount of the 2029 Exchangeable Notes to be exchanged and pay or deliver, as the case may be, cash, the Company’s common shares of beneficial interest (“Common Shares”), or a combination thereof, at the Issuer’s election, in respect of the remainder, if any, of its exchange obligation in excess of the aggregate principal amount of the 2029 Exchangeable Notes to be exchanged. The exchange rate initially equals 63.3332 Common Shares per $1,000 principal amount of 2029 Exchangeable Notes (equivalent to an initial exchange price of approximately $15.79 per Common Share). The exchange rate will be subject to adjustment upon the occurrence of certain events, but will not be adjusted for any accrued and unpaid interest. In addition, following the occurrence of certain corporate events, the Issuer will, in certain circumstances, increase the exchange rate for a holder that exchanges its 2029 Exchangeable Notes in connection with such corporate events.
The Issuer may not redeem the 2029 Exchangeable Notes prior to maturity, and no sinking fund will be provided for the 2029 Exchangeable Notes. If certain corporate events occur, subject to certain conditions, holders of the 2029 Exchangeable Notes may require the
