Sachem Capital Corp. Announces Closing of Public Offering of $14 Million of 7.75% Notes
Sachem Capital Corp. (NYSE American: SACH) today closed on the sale of $14 million aggregate principal amount of its 7.75% unsecured, unsubordinated notes due 2025 (“Notes”). The net proceeds of the offering to Sachem Capital Corp. are expected to be approximately $13.35 million after payment of underwriting discounts and commissions and estimated offering expenses. The Notes are a further issuance of, rank equally in right of payment with and form a single series for all purposes under the indenture governing the Notes with the $14,363,750 aggregate principal amount of 7.75% Notes due 2025 that the company issued in September 2020 (collectively referred to as the “September 2025 Notes”). The Notes have been approved for listing on the NYSE American and will trade under the symbol “SCCC,” the same trading symbol for the other September 2025 Notes, starting today.
Sachem Capital Corp. has granted the underwriters a 30-day option to purchase up to an additional $2.1 million aggregate principal amount of Notes to cover over-allotments, if any. The over-allotment option expires November 20, 2020.
The Notes rank pari passu with the company’s other unsecured, unsubordinated indebtedness, whether currently outstanding or issued in the future. Including the Notes, Sachem currently has an aggregate of approximately $86.5 million unsubordinated, unsecured notes outstanding.
The Notes will mature on September 30, 2025, and may be redeemed, in whole or in part, at any time, or from time to time, at the company’s option on or after September 4, 2022. Interest on the Notes will accrue at the annual rate of 7.75% and will be payable quarterly, in arrears, on each March 30, June 30, September 30 and December 30 that the Notes are outstanding, beginning December 30, 2020.
Sachem plans to use the net proceeds from the sale of the Notes for working capital and general corporate purposes, i.e., primarily to fund new real estate loans secured by first mortgage liens. Sachem may also use the net proceeds to acquire other real estate finance companies or existing mortgage loan portfolios, although no such transactions are pending at this time.
The Notes have a private rating of BBB+ from Egan-Jones Ratings Company, an independent, unaffiliated rating agency. Egan-Jones is a Nationally Recognized Statistical Ratings Organization (NRSRO) and is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP). Egan-Jones is also certified by the European Securities and Markets Authority (ESMA). A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time.