On Tuesday, July 17, after the markets closed, American Capital Agency Corp (AGNC) announced a large secondary offering. The REIT also released some Q2 2012 pre-earnings information in order to help support the issuance. This secondary offering is likely to bring in approximately $1.2 billion, depending upon pricing and over-allotments, before commissions and fees.
AGNC's secondary offering is for 32 million shares with an over-allotment option for another 4.8 million. Given the prior popularity of recent AGNC secondaries, it appears likely that the over-allotment option will be fully exercised. AGNC's last secondary was priced on March 7. That secondary ended up being for 62 million shares, though it was initially announced as a 54 million share secondary. In late June, I noted there was a strong likelihood that some secondaries could show up in mid-July, and others may still be forthcoming within the mREIT space.
AGNC's secondary offering is for 32 million shares with an over-allotment option for another 4.8 million. Given the prior popularity of recent AGNC secondaries, it appears likely that the over-allotment option will be fully exercised. AGNC's last secondary was priced on March 7. That secondary ended up being for 62 million shares, though it was initially announced as a 54 million share secondary. In late June, I noted there was a strong likelihood that some secondaries could show up in mid-July, and others may still be forthcoming within the mREIT space.
Generally speaking, investing in AGNC at or around a secondary offering price has been a profitable endeavor. Since the last secondary, AGNC shares have appreciated about 20 percent, or $5.40, while also paying a $1.25 dividend worth about another four percent. Of course, past history is no guarantee or even a true indicator of future results.
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