UPDATE 1-Invesco Mortgage to sell 8.7 mln shares

Tue Dec 14, 2010 4:41pm EST

* To use proceeds to buy mortgage-backed securities

* BofA Merrill, Wells Fargo to be book runners

Dec 14 (Reuters) - Invesco Mortgage Capital Inc (IVR.N) said it plans to sell 8.7 million shares and expects to use the proceeds to buy additional residential and commercial mortgage-backed securities and mortgage loans.

The Atlanta, Georgia-based mortgage real estate investment trust has about 28 million shares outstanding as of Sept. 30.

This is the company's fourth share offering since January.

The company, which raised about $170 million in an initial public offering in June 2009, will grant underwriters an option to buy up to an additional 1.3 million shares to cover excess demand.

BofA Merrill Lynch and Wells Fargo Securities are acting as joint book-running managers for the offering.

Shares of the company closed up 2 percent at $23.47 in regular session on the New York Stock Exchange. (Reporting by Sweta Singh in Bangalore; Editing by Don Sebastian)