QUANTUMONLINE.COM SECURITY DESCRIPTION: Great Ajax Corp. 7.25% Convertible Senior Notes due 2024, issued in $25 denominations, redeemable at the issuer's option on or after 4/30/2022 at $25 per note plus accrued and unpaid interest, and maturing 4/30/2024. Interest distributions of 7.25% per annum ($1.8125 per annum or $0.453125 per quarter) will be paid quarterly on 1/15, 4/15, 7/15 & 10/15 to holders of record on the record date that will be 1/1, 4/1, 7/1 & 10/1 respectively (NOTE: the ex-dividend date is one business day prior to the record date).
Distributions paid by these debt securities are interest and as such are NOT eligible for the preferential 15% to 20% tax rate on dividends and are also NOT eligible for the dividend received deduction for corporate holders.
The Notes will be convertible by holders into shares of the Company’s common stock at an initial conversion rate of 1.6267 shares of common stock per $25 principal amount of Notes, which is equivalent to an initial conversion price of approximately $15.37 per share of common stock. Upon conversion, holders will receive, at the Company’s discretion, cash, shares of the Company’s common stock or a combination thereof. Following the occurrence of a make-whole fundamental change or if the issuer gives notice of redemption, in certain circumstances the issuer may, increase the conversion rate for a holder that converts its notes in connection with such make-whole fundamental change or notice of redemption.
Holders may convert their notes at their option prior to 4/30/2023 only under certain circumstances (see page S-7 of the prospectus for futher details). The issuer may redeem for cash all or any portion of the notes on or after 4/30/2022 if the last reported sale price of the common stock has been at least 130% of the conversion price then in effect for at least 20 trading days during any 30 consecutive trading day period at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest (see prospectus for further details). If a fundamental change occurs, holders may require the issuer to purchase the notes, in whole or in part, for cash at a fundamental change purchase price equal to 100% of the principal amount of the notes to be purchased, plus accrued and unpaid interest see prospectus for further information).
Units are expected to trade flat, which means accrued interest will be reflected in the trading price and the purchasers will not pay and the sellers will not receive any accrued and unpaid interest.
This security was not rated by Moody’s or S&P at the time of its IPO. The Notes are unsecured and unsubordinated obligations of the company and will rank equally with all existing and future unsecured and unsubordinated indebtedness of the company. See the IPO prospectus for further information on the debt securities by clicking on the ‘Link to IPO Prospectus’ provided below.
