8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

June 5, 2020

Western Asset Mortgage Capital Corporation

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

 DELAWARE

(STATE OF INCORPORATION) 

001-35543	27-0298092
(COMMISSION FILE NUMBER)	(IRS EMPLOYER ID. NUMBER)

385 East Colorado Boulevard	91101
Pasadena, California	(ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

       (626) 844-9400

(REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, $0.01 par value	WMC	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐

Explanatory Note

On March 7, 2017, Western Asset Mortgage Capital Corporation, a Delaware corporation (the “Company”) entered into an equity distribution agreement (the “Equity Distribution Agreement”) with Western Asset Management Company, LLC (the “Manager”) and JMP Securities LLC (the “Placement Agent”), pursuant to which the Company may offer and sell up to $100,000,000 aggregate offering price of shares of its common stock, par value $0.01 per share (the “Shares”), from time to time through the Placement Agent, acting as agent and/or principal (the “Offering”). A copy of the Equity Distribution Agreement is filed as Exhibit 1.1 to the Current Report on Form 8-K filed by the Company on March 9, 2017. The Shares were initially offered pursuant to the Company’s shelf registration statement on Form S-3, including pre-effective amendment no. 1 thereto (Registration No. 333-216496), which was filed with the Securities and Exchange Commission (the “Commission”) on March 7, 2017 and declared effective on April 26, 2017 (the “2017 Registration Statement”). On May 19, 2020, the Company filed a new registration statement on Form S-3 (Registration No. 333-238486), which was declared effective by the Commission on May 26, 2020 (the “Registration Statement”), to replace the expired 2017 Registration Statement. On June 5, 2020, the Company filed a prospectus supplement (the “Prospectus Supplement”) pursuant to Rule 424(b)(5) related to the securities that remain unsold pursuant to the Offering. As of the date of the Prospectus Supplement, a maximum aggregate sales price of approximately $96,936,049.90 of Shares remained available for offer and sale from time to time pursuant to the Equity Distribution Agreement. This Current Report on Form 8-K is being filed to provide exhibits to be incorporated by reference into the Registration Statement.

Item 1.01Entry into a Material Definitive Agreement.

On June 5, 2020, the Company, the Manager and the Placement Agent entered into an amendment to the Equity Distribution Agreement (“Amendment No. 1”) to update references to the Registration Statement, update certain representations and make certain other updates to reflect changes that have occurred since the date of the original Equity Distribution Agreement. A copy of Amendment No. 1 is attached hereto as Exhibit 1.1 and incorporated herein by reference.

Skadden, Arps, Slate, Meagher & Flom LLP issued its opinion with respect to the validity of the Shares, which opinion is attached hereto as Exhibit 5.1 and is incorporated herein by reference.

Item 9.01.Financial Statements and Exhibits

(d)  Exhibits

Exhibit No.	Description
1.1*	Amendment No. 1 to the Equity Distribution Agreement, dated June 5, 2020, by and among Western Asset Mortgage Capital Corporation, Western Asset Management Company, LLC and JMP Securities LLC.
5.1*	Opinion of Skadden, Arps, Slate, Meagher & Flom LLP regarding the validity of the Shares.
23.1*	Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included as part of Exhibit 5.1 hereto).

*Filed herewith.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereto duly authorized.

Date:  June 5, 2020	By:	/s/ Lisa Meyer
		Name:	Lisa Meyer
		Title:	Chief Financial Officer and Treasurer

EX-1.1

WESTERN ASSET MORTGAGE CAPITAL CORPORATION

AMENDMENT NO. 1

TO

EQUITY DISTRIBUTION AGREEMENT

June 5, 2020

JMP Securities LLC

600 Montgomery Street, Suite 1100

San Francisco, California 94111

Ladies and Gentlemen:

Reference is made to the Equity Distribution Agreement, dated March 6, 2017 (the “Equity Distribution Agreement”), among Western Asset Mortgage Capital Corporation, a Delaware corporation (the “Company”), and Western Asset Management Company, LLC, a California limited liability company (the “Manager”), and JMP Securities LLC (the “Placement Agent”), pursuant to which the Company agreed to issue and sell through the Placement Agent, acting as agent and/or principal, shares of the Company’s common stock, par value $0.01 per share, having a maximum aggregate sales price of up to $100,000,000. All capitalized terms used in this Amendment No. 1 to the Equity Distribution Agreement among the Company, the Manager and the Placement Agent (this “Amendment”) and not otherwise defined herein shall have the respective meanings assigned to them in the Equity Distribution Agreement. The Company, the Manager and the Placement Agent agree as follows:

A.Amendments to Equity Distribution Agreement. The Equity Distribution Agreement is amended as follows:

(1)The first sentence of the second paragraph of Section 1 of the Equity Distribution Agreement shall be amended to replace “(File No. 333-194775)” with “(File No. 333-238486).”

(2)Section 5(a)(7) of the Equity Distribution Agreement shall be deleted in its entirety and replaced with “Each “subsidiary” of the Company (as such term is defined in Rule 1-02 of Regulation S-X) (each, a “Subsidiary” and, collectively, the “Subsidiaries”) has been duly organized and is validly existing in good standing under the laws of the jurisdiction of its incorporation or organization, has corporate or similar power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement, the General Disclosure Package and the Prospectus and is duly qualified to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify or to be in good standing would not result in a Material Adverse Effect. Except as otherwise disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, all of the issued and outstanding capital stock of each Subsidiary has been duly authorized and validly issued, is fully paid and non assessable and is owned by the Company, directly or

through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity. None of the outstanding shares of capital stock of any Subsidiary was issued in violation of the preemptive or similar rights of any securityholder of such Subsidiary.”

(3)Section 5(a)(29) of the Equity Distribution Agreement shall be shall be deleted in its entirety and replaced with “All United States federal income tax returns of the Company required by law to be filed have been timely and properly filed and all United States federal income taxes shown by such returns or otherwise due and payable have been paid, including any assessments, fines and penalties, except amounts against which appeals have been or will be timely taken and as to which adequate reserves have been provided. The Company has timely and properly filed all other tax returns that are required to have been filed by it pursuant to applicable foreign, state, local or other law except insofar as the failure to file such returns would not result in a Material Adverse Effect, and has paid all material taxes shown by such returns as due, including any assessments, fines and penalties, except for such taxes, if any, as are being contested in good faith and as to which adequate reserves have been provided.”

(4)Section 5(a)(43) of the Equity Distribution Agreement shall be deleted in its entirety and replaced with “[Reserved].”

(5)Section 5(b)(3) of the Equity Distribution Agreement shall be amended to replace each instance of “corporation” and “corporate” with “limited liability company.”

(6)Section 5(b)(4) of the Equity Distribution Agreement shall be amended to replace each instance of “incorporation or by-laws” with “formation or limited liability company agreement.”

(7)Section 6(b) of the Equity Distribution Agreement shall be amended to replace “third (3rd) Trading Day” with “second (2nd) Trading Day.”

(8)Section 7(i)(o) of the Equity Distribution Agreement shall be amended to replace “(2) the shelf registration statement filed on Form S-3 on March 7, 2017, and (3) the prospectus supplement, dated March 7, 2017” with “(2) the shelf registration statement filed on Form S-3 on May 19, 2020, and (3) the prospectus supplement, dated June 5, 2020.”

B.New Registration Statement Covered by Equity Distribution Agreement. The parties to this Amendment agree that from and after the initial filing of a Prospectus Supplement to the base prospectus included as part of the registration statement on Form S-3 (File No. 333-238486) filed with the Commission by the Company on May 19, 2020, all references to “Registration Statement” included in the Equity Distribution Agreement shall be deemed to include such registration statement on Form S-3 (File No. 333-238486), including a base prospectus, relating to, among other securities of the Company, the Common Stock, including the Securities to be issued from time to time by the Company, and the documents that the Company has filed or will file in accordance with the provisions of the Exchange Act that are or will be incorporated by reference in such registration statement, and all references to “base prospectus” included in the Equity Distribution Agreement shall be deemed to include the final form of prospectus, including all documents incorporated therein by reference, included in such registration statement at the time of the initial filing of a Prospectus Supplement to the base prospectus included as part of

such registration statement. For the avoidance of confusion, all references to “Registration Statement” included in the Equity Distribution Agreement relating to the offer and sale of any Securities or such other relevant action that occurred prior to the filing with the Commission of the registration statement on Form S-3 (File No. 333-238486) shall be deemed to refer to the Company’s registration statement on Form S-3 (File No. 333-194775), including a base prospectus, relating to, among other securities of the Company, the Common Stock, including the Securities, including all documents incorporated by reference therein.

C.No Other Amendments. Except as set forth in Part A and B above, all the terms and provisions of the Equity Distribution Agreement shall continue in full force and effect.

D.Counterparts. This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery of an executed Amendment by one party to the other may be made by facsimile or email transmission.

E.Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CHOICE OF LAW OR CONFLICTS OF LAW PRINCIPLES THEREOF (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

F.Severability. If any provision of this Amendment is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Amendment shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

G.Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof.

[Signature Page Follows]

If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company and the Manager a counterpart hereof, whereupon this Amendment, along with all counterparts, will become a binding agreement by and among the Placement Agent, the Company and the Manager in accordance with its terms.

Very truly yours,

WESTERN ASSET MORTGAGE CAPITAL CORPORATION

By: /s/ Lisa Meyer

Lisa Meyer

Chief Financial Officer and Treasurer

WESTERN ASSET MANAGEMENT COMPANY, LLC

By: /s/ Charlie A. Ruys de Perez

Charles A. Ruys de Perez

Secretary

CONFIRMED AND ACCEPTED, as of the date first above written:

JMP SECURITIES LLC

By: /s/ Tosh Chandra

Authorized Signatory

EX-5.1

Exhibit 5.1

June 5, 2020

Western Asset Mortgage Capital Corporation

385 East Colorado Boulevard

Pasadena, CA 91101

Re: Western Asset Mortgage Capital Corporation

Common Stock At-the-Market Offering Program

Ladies and Gentlemen:

We have acted as special United States counsel to Western Asset Mortgage Capital Corporation, a Delaware corporation (the “Company”), in connection with the Company’s sale of up to $96,936,049.90 aggregate offering price of shares (the “Shares”) of common stock, par value $0.01 per share (the “Common Stock”) of the Company, pursuant to the Equity Distribution Agreement, dated March 6, 2017, by and between JMP Securities LLC, as placement agent, the Company and Western Asset Management Company, as the manager of the Company (the “Original Sales Agreement”), as amended by Amendment No. 1 to the Original Sales Agreement, dated June 5, 2020 (the “Amendment” and, together with the Original Sales Agreement, the “Sales Agreement”).

This opinion is being furnished in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act of 1933 (the “Securities Act”).

In rendering the opinion stated herein, we have examined and relied upon the following:

a.the registration statement on Form S-3 (File No. 333-238486) of the Company relating to the Shares and other securities of the Company filed on May 19, 2020 with the Securities and Exchange Commission (the “Commission”) under the Securities Act allowing for delayed offerings pursuant to Rule 415 of the General Rules and Regulations under the Securities Act (the “Rules and Regulations”), including the information deemed to be a part of the registration statement pursuant to Rule 430B of the Rules and Regulations and the Notice of Effectiveness of the Commission posted on its website declaring such registration statement effective on May 26, 2020 (such registration statement being hereinafter referred to as the “Registration Statement”);

b.the prospectus, dated May 26, 2020 (the “Base Prospectus”), which forms a part of and is included in the Registration Statement;

c.the prospectus supplement, dated June 5, 2020 (together with the Base Prospectus, the “Prospectus”) relating to the offering of the Shares, in the form filed with the Commission pursuant to Rule 424(b) of the Rules and Regulations;

d.an executed copy of the Sales Agreement;

e.an executed copy of a certificate of Charles A. Ruys de Perez, Secretary of the Company, dated the date hereof (the “Secretary’s Certificate”)

f.a copy of the Company’s Amended and Restated Certificate of Incorporation, certified by the Secretary of State of the State of Delaware as of June 5, 2020, and certified pursuant to the Secretary’s Certificate (the “Amended and Restated Certificate of Incorporation”);

g.a copy of the Company’s Amended and Restated Bylaws, as amended and in effect as of the date hereof (the “Amended and Restated Bylaws”) and certified pursuant to the Secretary’s Certificate; and

h.a copy of certain resolutions of the Board of Directors of the Company, adopted on March 2, 2017 and certain resolutions of the Pricing Committee thereof, adopted on March 7, 2017, certified pursuant to the Secretary’s Certificate.

We have also examined originals or copies, certified or otherwise identified to our satisfaction, of such records of the Company and such agreements, certificates and receipts of public officials, certificates of officers or other representatives of the Company and others, and such other documents as we have deemed necessary or appropriate as a basis for the opinion stated below, including the facts and conclusions set forth in the Secretary’s Certificate and the factual representations and warranties contained in the Sales Agreement.

In our examination, we have assumed the genuineness of all signatures, the legal capacity and competency of all natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as facsimile, electronic, certified or photocopied copies, and the authenticity of the originals of such copies. As to any facts relevant to the opinions stated herein that we did not independently establish or verify, we have relied upon statements and representations of officers and other representatives of the Company and others and of public officials, including the factual representations and warranties contained in the Sales Agreement. We have also assumed that the issuance of the Shares does not violate or conflict with any agreement or instrument binding on the Company (except that we do not make this assumption with respect to the Amended and Restated Certificate of Incorporation, the Amended and Restated Bylaws or with respect to those agreements or instruments which are listed in Part II of the Registration Statement or the Company’s most recent Annual Report on Form 10-K).

We do not express any opinion with respect to the laws of any jurisdiction other than the General Corporation Law of the State of Delaware (the “DGCL”).

Based upon the foregoing and subject to the qualifications and assumptions stated herein, we are of the opinion that the Shares have been duly authorized by all requisite corporate action on the part of the Company under the DGCL and when issued and sold in accordance with the Sales Agreement, will be validly issued, fully paid and nonassessable, provided that the consideration therefor is not less than $0.01 per share.

We hereby consent to the reference to our firm under the heading “Legal Matters” in the Prospectus. We also hereby consent to the filing of this opinion with the Commission as an exhibit to the Company’s Current Report on Form 8-K being filed on the date hereof and incorporated by reference into the Registration Statement. In giving this consent, we do not

thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the Rules and Regulations.

Very truly yours,

/s/ Skadden, Arps, Slate, Meagher & Flom LLP