PennyMac Prices $75 Million Exchangeable Senior Notes Offering
Written by Emily J. Thompson, Senior Investment Analyst
Source: Businesswire
Updated: 4 minutes ago0mins
- Offering Size: PennyMac Corp. has successfully priced an offering of $75 million in 8.500% Exchangeable Senior Notes, expected to close on December 15, 2025, enhancing the company's capital structure flexibility.
- Interest Rate Advantage: The notes carry an interest rate of 8.500%, consistent with the previously issued $216.5 million notes in May 2024, ensuring competitive financing conditions for the company in the future.
- Use of Proceeds: The net proceeds are expected to be approximately $75.5 million, intended for repaying a portion of mortgage servicing rights borrowings and repurchasing maturing notes, thereby optimizing financial obligations and improving liquidity.
- Exchange Terms: The initial exchange price of approximately $15.79 per share represents a 25% premium over the current stock price, providing investors with potential capital appreciation opportunities.
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Analyst Views on PMT
Wall Street analysts forecast PMT stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for PMT is 13.85 USD with a low forecast of 13.00 USD and a high forecast of 14.50 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
7 Analyst Rating
1 Buy
6 Hold
0 Sell
Hold
Current: 12.550
Low
13.00
Averages
13.85
High
14.50
Current: 12.550
Low
13.00
Averages
13.85
High
14.50
UBS
Neutral
maintain
$13
2025-10-24
Reason
UBS
Price Target
$13
2025-10-24
maintain
Neutral
Reason
UBS raised the firm's price target on PennyMac Mortgage to $13.50 from $13 and keeps a Neutral rating on the shares.
BofA
Neutral
downgrade
2025-08-18
Reason
BofA
Price Target
2025-08-18
downgrade
Neutral
Reason
BofA lowered the firm's price target on PennyMac Mortgage to $12.50 from $13.50 and keeps a Neutral rating on the shares. Following a Q2 miss, the firm is lowering its 2025 EPS estimate and "modestly lowering" its 2026 EPS estimate due to higher operating expense estimates. More broadly, the firm remains cautious on the mortgage sector due to high rates and elevated competition, which should continue to weigh on production volume and margins, the analyst tells investors.
Keefe Bruyette
Outperform -> Market Perform
downgrade
2025-07-24
Reason
Keefe Bruyette
Price Target
2025-07-24
downgrade
Outperform -> Market Perform
Reason
Keefe Bruyette downgraded PennyMac Mortgage to Market Perform from Outperform with a price target of $13.50, down from $14.50.
Keefe Bruyette
Keefe Bruyette
Outperform
to
Market Perform
downgrade
2025-07-24
Reason
Keefe Bruyette
Keefe Bruyette
Price Target
2025-07-24
downgrade
Outperform
to
Market Perform
Reason
Keefe Bruyette downgraded PennyMac Mortgage to Market Perform from Outperform with a price target of $13.50, down from $14.50. The firm reduced estimates post the Q2 report, now seeing the company's earnings per share moving in line with the 40c dividend by the second half of 2027 versus prior expectations for the end of 2026. Keefe cites PennyMac's book value decline in Q2 and the slower timeline to reaching a double-digit return on equity for the downgrade. It sees limited near-term catalysts for the shares.
See All Ratings
About PMT
PennyMac Mortgage Investment Trust is a mortgage real estate investment trust (REIT) that invests primarily in residential mortgage loans and mortgage-related assets. The Company's segments include credit sensitive strategies, interest rate sensitive strategies and correspondent production. The credit sensitive strategies segment represents its investments in CRT arrangements referencing loans from its own correspondent production and subordinate MBS. The interest rate sensitive strategies segment represents its investments in MSRs, Agency and senior non-Agency MBS and the related interest rate hedging activities. The correspondent production segment represents its operations aimed at serving as an intermediary between lenders and the capital markets by purchasing, pooling and reselling newly originated prime credit quality loans either directly or in the form of MBS, using the services of PCM and PLS. The Company is externally managed by PNMAC Capital Management, LLC.
About the author
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Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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