BlackRock Converts Stake in Affiliate of PennyMac Into Shares

BlackRock Inc. converted part of its stake in an affiliate of PennyMac Financial Services Inc. into shares of the parent mortgage company that’s run by former Countrywide Financial Corp. executives.

BlackRock Mortgage Ventures LLC, a wholly owned unit of the world’s largest money manager, traded 1.8 million of its shares in Private National Mortgage Acceptance Co. into a similar amount of stock in PennyMac Financial, according to a filing today with the U.S. Securities and Exchange Commission.

The exchange authorized under an earlier agreement occurred Dec. 13, leaving BlackRock with 13.8 million stock units in Private National Mortgage Acceptance Co. that can also be converted into shares in PennyMac Financial, the filing shows.

“The December conversion was done for corporate financial purposes,” Brian Beades, a spokesman for New York-based BlackRock, said by e-mail. “We continue to see PennyMac as a long-term strategic investment.”

BlackRock helped former Countrywide President Stanford Kurland found Private National Mortgage Acceptance in 2008. The money management firm and its clients own 47 percent of PennyMac shares under a calculation that includes the stake in the affiliate, according to the filing. It holds 512,631 shares on behalf of clients, the filing states.

Christopher Oltmann, a spokesman for Moorpark, California-based PennyMac, declined to comment.

Sole Asset

PennyMac Financial’s sole asset is its stake in Private National Mortgage Acceptance Co., which it controls and which engages in mortgage banking and investment management, according to an SEC filing in November.

Highfields Capital Management LP also is a strategic partner in Private National Mortgage Acceptance Co., which is structured as a limited liability corporation, according to its website.

“BlackRock continues to maintain a 20 percent economic interest in PFSI,” said Beades. “The higher number is calculated based on SEC rules which assumes the conversion of LLC units held by BlackRock for shares in the publicly traded parent -- there are also other holders of LLC units.”

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