Firm’s IPO gets muted response
A firm set up by former Countrywide Financial Corp. executives to invest in troubled home loans fell short of its fundraising goal in an initial public stock sale Wednesday.
PennyMac Mortgage Investment Trust priced 16 million shares at $20 each, raising $320 million. The trust had expected to sell 20 million shares at that price. Earlier this month, the Calabasas company had hoped to raise as much as $750 million.
The stock will begin trading today on the New York Stock Exchange under the ticker symbol PMT.
PennyMac is the brainchild of Stanford Kurland, who was president of Countrywide until resigning in 2006 -- a year before the company began to crumble amid rising loan losses.
Kurland, 57, now hopes to profit by cleaning up the mortgage mess left by Countrywide and other lenders. That has rankled critics who say Kurland is at least partly responsible for the subprime loan boom fueled by Countrywide.
Kurland and other former Countrywide officers formed Private National Mortgage Acceptance Co. early in 2008 to buy troubled mortgages from lenders. They’ve already raised hundreds of millions of dollars from private investors. The PennyMac Mortgage Investment Trust, structured as a real estate investment trust, now will be Kurland’s public vehicle for buying loans.
PennyMac says its overriding goal is to restructure loans to keep borrowers in their homes while still earning a hefty return on the debt.
But the soft demand for the shares suggested that some investors are skeptical of the firm’s profit potential.