8-K: Great Ajax Corp. Enters Into Amended At-the-Market Issuance Sales Agreements, Plans $100 Million Stock Offering

Great Ajax Corp. has entered into new agreements to sell up to $100 million of its common stock through at-the-market offerings, while terminating previous sales agreements.

Summary

• Great Ajax Corp. has entered into amended and restated at-the-market issuance sales agreements with B. Riley Securities, Inc. and BTIG, LLC.
• These agreements allow the company to sell up to $100 million of its common stock through the agents.
• The sales will be made through ordinary broker transactions on the New York Stock Exchange at market prices or as otherwise agreed upon.
• The company may also sell shares to an agent as principal for its own account at an agreed price.
• Great Ajax Corp. has terminated its previous at-the-market issuance sales agreements with JMP Securities LLC and Raymond James & Associates, Inc.

Sentiment

Score: 6

Explanation: The document is neutral to slightly positive. It outlines a standard capital-raising activity, which is generally positive for a company's financial flexibility, but also carries the risk of dilution.

Positives

• The new agreements provide Great Ajax Corp. with a flexible way to raise capital.
• The company has the option to sell shares at market prices or through negotiated deals.
• The termination of previous agreements simplifies the company's sales agent relationships.

Risks

• There is no guarantee that the company will be able to sell all $100 million of its common stock.
• The market price of the company's stock could be negatively impacted by the sale of new shares.
• The company's reliance on at-the-market offerings could lead to dilution of existing shareholders' equity.

Future Outlook

The company intends to use the proceeds from the stock offering for general corporate purposes, as detailed in the registration statement and prospectus.

Industry Context

At-the-market offerings are a common method for companies to raise capital, providing flexibility and potentially minimizing market impact compared to traditional underwritten offerings. This move allows Great Ajax to tap into the market as needed.

Comparison to Industry Standards

• Many REITs and other publicly traded companies use at-the-market (ATM) offerings to raise capital opportunistically.
• The $100 million offering size is within the typical range for companies of Great Ajax's size.
• The use of multiple sales agents is also a common practice to maximize distribution and minimize market impact.
• Comparable companies that have used ATM offerings include AGNC Investment Corp., Annaly Capital Management, and other mortgage REITs.

Stakeholder Impact

• Shareholders may experience dilution of their ownership stake.
• The company will have additional capital to fund its operations and growth.
• The company's financial position may be strengthened by the capital raise.

Next Steps

• The company will begin selling shares through the agents as market conditions allow.
• The company will file prospectus supplements with the SEC as required.
• The company will continue to comply with all applicable securities laws and regulations.

Key Dates

Keywords

at-the-market offering, common stock, capital raise, sales agreement, B. Riley Securities, BTIG, equity financing, share issuance, NYSE