The New IPOs
The two newly formed companies are PennyMac Investment Trust (NYSE: PMT – proposed) and Sutherland Asset Management (NASDAQ: SLD – proposed). Each is a specialty finance company that filed S-11 papers to be real estate investment trusts. They are part of a crowd lining up to buy the toxic assets from banks under the U.S. government’s Public-Private Investment Plan, or PPIP. Here’s the lowdown:
- PennyMac Investment Trust, based in Calabasas, California, plans to invest mostly in residential mortgage loans and mortgage-related assets. The company expects to offer 20 million shares at $20 each to be priced on Wednesday evening, July 29, to trade on the New York Stock Exchange on Thursday morning, July 30. The joint-lead managers are Merrill Lynch, Credit Suisse and Deutsche Bank Securities. Acting as co-managers are JMP Securities and Stifel Nicolaus.
- Sutherland Asset Management, based in New York City, plans to acquire residential mortgage-backed securities from U.S. government agencies and non-agencies as well as other financial assets. The company expects to offer 16.7 million shares at $15 each to be priced on Monday evening, July 27, to trade on the New York Stock Exchange on Tuesday morning, July 28. The joint-lead managers are UBS Investment Bank and Keefe, Bruyette & Woods. Acting as co-managers are JMP Securities, Macquarie and Stifel Nicolaus.
Of course, investors and traders are always interested in an IPO’s aftermarket performance. To make a call, the IPO handicappers usually look at past performance of similar IPOs. To date, there has been only one PPIP IPO that made its debut:
Invesco Mortgage Capital (NYSE: IVR), based in Atlanta, Georgia, was recently formed to invest in, finance and manage residential and commercial mortgage-backed securities and mortgage loans.
On June 26, 2009, the company offered 8.5 million shares at $20 each. The IPO has traded in a narrow price range since going public. It traded as high as $20.06 per share, as low as $19.25, and it closed on Friday at $19.97, DOWN 1.2 percent from its initial offering price.
The Old “IPO”
Globe Specialty Metals (AIM: GLBM), based in New York City, believes it is one of the leading manufacturers of silicon metal and silicon-based alloys. The company owns and operates seven manufacturing facilities located in Beverly, Ohio; Alloy, West Virginia; Mendoza, Argentina; San Luis, Argentina; Breu Branco, Brazil; Police, Poland and Shizuishan, China.
In April 2003, the company filed a petition for relief under Chapter 11 of the federal bankruptcy laws in the U.S. Bankruptcy Court for the Southern District of New York, and emerged from bankruptcy on May 2004. The present company was incorporated in December 2004.
Its prospectus states: “Prior to this offering, there had been no public market for shares of our common stock in the United States. (BUT) Our common stock has been listed on the AIM market since October 2005, currently under the symbol ‘GLBM.’”
Its common stock has traded as high as $32.86 in August 2008, as low as $1.50 in March 2009, and it was last seen at $7.00 per share – on London’s AIM.
Globe Specialty plans to offer 14 million shares at $7 to $9 each. The company will offer 5.6 million shares and selling shareholders will offer 8.4 million shares. The deal is expected to be priced on Wednesday evening, July 29, to trade on the NASDAQ Global Select Market under the proposed symbol “GSM” on Thursday morning, July 30.
The joint-lead managers are: Credit Suisse, Jefferies and J.P. Morgan.
This will wrap up July’s IPO traffic. And then it’s on to August.