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Based in Pasadena, California, Western Asset Mortgage Capital (NYSE:WMC) scheduled a $160 million IPO with a market capitalization of $206 million for Thursday, May 10, 2012. [S-1]

WMC is one of 12 IPOs scheduled for the week of May 7 (Full IPO calendar here).

Manager; Joint Managers: Deutsche; J.P. Morgan; Citigroup; Jefferies.

SUMMARY
WMC is a start-up mortgage REIT IPOing at book value.

CONCLUSION
There are more established mortgage REITs available with track records to look at. There's no need to speculate on WMC, which appears to be just a vehicle to make money for Legg Mason, which already manages $443 billion in assets.

BUSINESS
WMC is organized as a Delaware corporation focused on investing in, financing and managing primarily residential mortgage-backed securities, or RMBS, for which the principal and interest payments are guaranteed by a U.S. Government agency, such as the Government National Mortgage Association. Guarantors also include U.S. Government-sponsored entities, such as the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation.

MANAGER
WMC will be externally managed and advised by Western Asset Management Company.

Established in 1971 and acquired by Legg Mason in 1986, WMC is a registered investment advisor headquartered in Pasadena, California, that specializes in fixed-income asset management. As of December 31, 2011, the Manager had 529 clients, representing 40 countries and 1051 accounts

As of December 31, 2011, WMC's Manager and its investment advisory affiliates over which the Manager has operational responsibility, or its supervised affiliates, had $443 billion in assets under management.

As of December 31, 2011, WMC's Manager itself had a total of $61.5 billion in assets under management in the asset classes corresponding to Agency RMBS and potential target assets, of which $37.6 billion was invested in Agency RMBS, $13.8 billion in non-Agency RMBS, $2.4 billion in CMBS and $7.7 billion in ABS.

MANAGEMENT FEE
WMC will be entitled to a management fee equal to 1.5% per annum, calculated and payable quarterly in arrears, of WMC's stockholders' equity.

USE OF PROCEEDS
WMC expects to net $160 million from the IPO and $45.6 million from a concurrent with the IPO private placement of $45.6 million. The proceeds are expected to be invested in mortgage backed investments.

Disclaimer: This WMC IPO report is based on a reading and analysis of WMC's S-1 filing which can be found here, and a separate, independent analysis by IPOdesktop.com. There are no unattributed direct quotes in this article.

Source: IPO Preview: Western Asset Mortgage Capital