Western Asset off 5% after large secondary

|About: Western Asset Mortgage C... (WMC)|By:, SA News Editor

You knew this one was coming given the premium to book value the stock was trading at: Western Asset Mortgage (WMC) is off 5.1% in premarket action after a massive 13M share secondary offering that will boost the float by more than 50%.

Along with the offering, WMC will issue and sell in a private placement common shares to its manager, Western Asset Management Company. The number sold will equal 5% of the total sold in the public offering, subject to a maximum purchase price of $10M.

The company estimated book value per share of $15.18 at the end of February. Prior to the offering the shares closed at $15.44 last night after falling sharply over the past couple of weeks - maybe as smart investors cashed in ahead of what they knew to be an imminent sale of stock.