Invesco Plans Another Share Sale on Expected Positive Q1 Results

Real estate investment trust (REIT) Invesco Mortgage Capital (IVR) said today it expects $0.77 earnings per share in Q110, narrowed from $1.02 per share in the previous quarter. The positive expectation comes as Invesco is planning yet another sale of shares. The REIT also expects its book value to total approximately $20.26 per share in Q110, compared with $20.39 in the previous quarter. Invesco attributed the expected narrowed results to fewer securities sales within the company’s portfolio during the quarter, and to the impact on net interest income related to the use of capital raised from the last public offering in January. The change in expected book value for Q110 is attributable to an altered mix of mortgage-backed securities (MBS) held in the company’s portfolio, as well as changes in the valuation of the portfolio, Invesco said in a press release (download here). The company also unveiled plans today to offer 9m shares of its common stock, with an option for the underwriters to purchase up to an additional 1.35m shares, to cover any over-allotments. Invesco said today it expects to use the net proceeds from the sale to buy more commercial MBS and mortgage loans. Credit Suisse Securities and Morgan Stanley (MS) will act as joint book-running managers for the offering, Invesco said in a press release (download here). If Invesco sees a repeat of investor interest like that it received earlier this year, the sale is very likely to succeed. The REIT, which went public in June 2009, priced its second offering just six months later. The offering of 7m shares priced in January at $21.25 per share, raising an initial $149m with an option for underwriters to purchase up to an additional 1.05m shares to cover any over-allotments. The over-allotment raised more than $22m, bringing gross proceeds to $171m, a strong indication of abundant investor demand. Write to Diana Golobay. Disclosure: the author holds no relevant investments.

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