NEW YORK--(BUSINESS WIRE)--Two Harbors Investment Corp. (NYSE: TWO), a leading hybrid mortgage real estate investment trust, today announced it has entered into an agreement to contribute its equity interests in TH Commercial Holdings LLC to Granite Point Mortgage Trust Inc. (“Granite Point”) simultaneously with the closing of Granite Point’s initial public offering (“IPO”) of its common stock. The $651 million in equity interests to be contributed include Two Harbors’ portfolio of commercial real estate assets of approximately $1.8 billion, related secured indebtedness of approximately $1.2 billion and net working capital of approximately $0.1 billion, subject to a post-closing adjustment.
In exchange for the contribution, Granite Point will issue to Two Harbors approximately 33.1 million shares of common stock of Granite Point, which will represent approximately 76.5% of the outstanding stock of Granite Point after the IPO. The shares received by Two Harbors will be subject to a 120 day lock-up period following the closing of the IPO, after which Two Harbors anticipates that it will distribute the shares to Two Harbors’ stockholders by means of a special pro rata dividend, subject to the discretion and approval of its Board of Directors and in compliance with applicable securities laws. In connection with the Granite Point IPO, Two Harbors also agreed, subject to certain conditions, to purchase up to $20 million of Granite Point common stock in the open market at designated prices pursuant to a share purchase program that will extend for a period commencing four full calendar weeks after the IPO and ending on the earlier of the date on which all the capital committed to the plan has been exhausted or the date preceding the ex-dividend date associated with Two Harbors’ declaration of the pro rata distribution of Granite Point’s common stock to Two Harbors’ stockholders, but no later than December 31, 2017. Two Harbors does not intend to distribute any shares it acquires through the share purchase program to stockholders as part of the special dividend.
Granite Point was formed by Two Harbors in order to continue and expand the commercial real estate lending business established by Two Harbors. Granite Point will focus on directly originating, investing in and managing a portfolio of commercial real estate loans and other debt and debt-like instruments. Granite Point will be externally managed by Pine River Capital Management L.P., which is the parent company of Two Harbors’ external manager.
The Board of Directors of Two Harbors formed a committee of independent directors to review, negotiate and approve the Granite Point transaction. Freshfields Bruckhaus Deringer LLP served as legal counsel to the Special Committee and Credit Suisse served as financial adviser to the Special Committee with respect to the proposed contribution and to represent the interests of Two Harbors and its stockholders with respect to the proposed transaction. The contribution remains subject to satisfaction of all conditions to the closing of the transaction set forth in the agreement, including the completion of the Granite Point IPO.
A registration statement relating to Granite Point’s initial public offering has been filed with the Securities and Exchange Commission and became effective as of today’s date. This press release does not constitute an offer of any securities for sale.
Two Harbors Investment Corp.
Two Harbors Investment Corp., a Maryland corporation, is a real estate investment trust that invests in residential mortgage-backed securities, mortgage servicing rights, commercial real estate and other financial assets. Two Harbors is headquartered in New York, New York, and is externally managed and advised by PRCM Advisers LLC, a wholly owned subsidiary of Pine River Capital Management L.P. Additional information is available at www.twoharborsinvestment.com.
This press release includes “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995, including with respect to the completion of the contribution, the IPO and the distribution of shares of Granite Point common stock to Two Harbors stockholders. Actual results may differ from expectations, estimates and projections and, consequently, readers should not rely on these forward-looking statements as predictions of future events. Words such as “expect,” “target,” “assume,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believe,” “predicts,” “potential,” “continue,” and similar expressions are intended to identify such forward-looking statements. These forward looking statements involve significant risks and uncertainties that could cause actual results to differ materially from expected results.
Readers are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Two Harbors does not undertake or accept any obligation to release publicly any updates or revisions to any forward-looking statement to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based. Additional information concerning these and other risk factors is contained in Two Harbors’ most recent filings with the Securities and Exchange Commission. All subsequent written and oral forward looking statements concerning Two Harbors or matters attributable to Two Harbors or any person.
Stockholders of Two Harbors and other interested persons may find additional information regarding the company at the Securities and Exchange Commission’s Internet site at www.sec.gov or by directing requests to: Two Harbors Investment Corp., 590 Madison Avenue, 36th floor, New York, NY 10022, telephone 612-629-2500.