Tapping the equity market to raise funds, Ares Commercial Real Estate Corporation ACRE has priced an underwritten public offering of 6,500,000 shares. Further, as part of the offering, the company will give underwriters a 30-day option to purchase up to an additional 975,000 shares.
Total gross proceeds from the offering are estimated to be $102.8 million. The offering, subject to the fulfillment of customary closing conditions, is expected to close on Jun 22, 2021.
The company plans to utilize the net proceeds for general corporate needs, including financing investments in mortgage loans, and other target assets and investments, in line with its investment strategies and investment guidelines. Moreover, proceeds will be used for funding commitments on existing mortgage loans and repaying debt.
While the share offering is likely to enhance Ares Commercial’s liquidity, it is expected to result in earnings per share dilution in the near term.
Shares of this Zacks Rank #3 (Hold) company have gained 58.6% over the past year compared with the industry's growth of 41.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Markedly, in recent times a number of REITs have been tapping the equity and debt markets to raise funds and strengthen liquidity.
Crown Castle International Corp. CCI recently announced a public offering of 2.500% senior notes due 2031 for the aggregate principal amount of $750 million. The net proceeds are anticipated to be around $739 million and will be used to repay outstanding indebtedness.
Hannon Armstrong Sustainable Infrastructure Capital, Inc. HASI recently upsized its previously-announced private senior unsecured notes offering from $750 million to $1 billion in aggregate principal amount due 2026.
Apollo Commercial Real Estate Finance, Inc. ARI recently upsized and priced a private offering of $500 million in aggregate principal amount of 4.625% senior secured notes maturing 2029.
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