Mortgage Investors of Washington, a Maryland business trust, has approved principal modifications of its previously announced agreement with General Investment Management of Eindhoven, Holland.
The new agreement calls for 1.25 million newly issued shares of beneficial interest in the trust to be sold for $4 each to European investors designated by GIM, subject to trust approval. The sale would allow the trust to borrow on a secured basis about $8 million from a bank in the Netherlands for one year at a rate under 2 percent above the London interbank market rate.
Proceeds of the share sales and bank loan, if consummated, would be applied by the trust towards repayment of the $14.615 million of the trust's floating rate notes due on Nov. 1. GIM also will arrange, within 180 days of the initial sale of shares, to either sell $17 million of new convertible debentures of the trust for a term of approximately 4 years or to sell about 2 million additional shares to GIM-selected European investors at $4 a share.
About one-half of the proceeds of the sale of convertible debentures (or all the proceeds of the sale of additional shares) would be applied to the repayment of the bank loan. The remaining half of the proceeds from the sale of the debentures, if made would be invested and deposited as security for the repayment of the debentures.