AG Mortgage Investment Trust adjusts IPO expectations
AG Mortgage Investment Trust Inc., a recently formed mortgage REIT managed by Angelo, Gordon & Co., lowered expectations for its upcoming initial public offering from $300 million to roughly $248 million. The trust is offering 12.5 million shares at $20 each, according to filings Monday with the Securities and Exchange Commission. It plans to trade on the New York Stock Exchange under the symbol MITT. The company initially filed to offer 20 million shares for $15 a share. Proceeds, which could climb to as high as $287.5 million if underwriters exercise an over allotment option, will be used to acquire mortgage securities, including those guaranteed by Ginnie Mae and those acquired by Freddie Mac and Fannie Mae. AG Mortgage Investment Trust is going public at a time when REITs are hot in the market. Demand for agency mortgage-backed securities is rising, according to a recent Barclays Capital report. And REITs, which try to capitalize on spread differential, are coming to market with IPOs, raising some $6.6 billion of new capital since December. "One of the underlying motives for these firms is a potential lack of available credit to fund new mortgages going forward as result of a wind-down of the GSEs and new risk retention rules for securitizations, both of which could increase demand for private capital for mortgage lending," according to Craig Guttenplan, an analysts with CreditSights. The REIT plans to use a portion of the proceeds to invest in a portfolio of residential mortgage-backed securities and other assets, including commercial mortgage-backed securities. Research firm Keefe, Bruyette & Woods said earlier in April that REITs are poised to increase their ownership in U.S. institutional commercial real estate. Write to Kerri Panchuk.