BRANFORD, Conn.--(BUSINESS WIRE)--Sachem Capital Corp. (NYSE American: SACH) announces the pricing of a registered public offering of $14 million aggregate principal amount of 7.75% unsecured, unsubordinated notes due 2025. 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 payable by Sachem Capital Corp. The Notes will be 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 offering is expected to close on October 23, 2020, subject to customary closing conditions. 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 current outstanding and planned September 2025 Notes will rank pari passu with all the company’s unsecured, unsubordinated indebtedness, whether currently outstanding or issued in the future. The planned Notes are expected to be listed on the NYSE American under and begin to trade on or about October 23, 2020 under the trading symbol “SCCC,” along with the aforementioned outstanding September 2025 Notes.
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.
The Notes have a private credit 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.
Ladenburg Thalmann & Co. Inc., Janney Montgomery Scott LLC and National Securities Corporation, a wholly owned subsidiary of National Holdings Corporation (NASDAQ: NHLD) are acting as joint book-running managers for the offering. Aegis Capital Corp. is acting as co-manager for the offering.
This press release does not constitute an offer to sell or the solicitation of an offer to buy the securities in this offering or any other securities nor will there be any sale of the Notes or any other securities referred to in this press release in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of such state or jurisdiction.
About Sachem Capital Corp.
Sachem Capital Corp. specializes in originating, underwriting, funding, servicing, and managing a portfolio of first mortgage loans. It offers short term (i.e., three years or less) secured, nonbanking loans (sometimes referred to as “hard money” loans) to real estate investors to fund their acquisition, renovation, development, rehabilitation or improvement of properties located primarily in Connecticut. The company does not lend to owner occupants. The company’s primary underwriting criteria is a conservative loan to value ratio. The properties securing the company’s loans are generally classified as residential or commercial real estate and, typically, are held for resale or investment. Each loan is secured by a first mortgage lien on real estate. Each loan is also personally guaranteed by the principal(s) of the borrower, which guaranty may be collaterally secured by a pledge of the guarantor’s interest in the borrower. The company also makes opportunistic real estate purchases apart from its lending activities. The company believes that it qualifies as a real estate investment trust (REIT) for federal income tax purposes and has elected to be taxed as a REIT beginning with its 2017 tax year.
