KBW raises PTs on some residential mortgage REITs on improved market outlook
14/04/2020 14:27
** Keefe, Bruyette & Woods raises PTs on Annaly Capital
Management NLY.N , New Residential Investment Corp NRZ.N ,
Chimera Investment Corp CIM.N and Ellington Financial Inc
EFC.N to reflect improved market outlook
** KBW analyst Bose George says his previous numbers assumed
further significant declines in capital driven by pressure on
asset prices, and ongoing financing challenges in the repo
market
** Since qtr-end, pricing for non-Agency MBS appears to have
strengthened, and repo market functioning has stabilized, George
says
** He adds to extent capital markets remain relatively well
supported, these four cos could be in position to recoup some of
the unrealized losses reflected in their book value
** Mortgage REITs were battered in Mar by dramatic
volatility and deluge of margin calls from repo lenders, forcing
them to sell assets and/or slash their dividends due to market
dislocations created by the COVID-19 pandemic
KBW Price Changes:
** Meanwhile, the number of people with mortgages in
forbearance jumped by a third in the latest week as the novel
coronavirus outbreak stretches household balance sheets, a
survey released by the Mortgage Bankers Association showed on
Mon urn:newsml:reuters.com:*:nL2N2C11E0
** The US mortgage industry has urged the Fed and US
Treasury to create a lending program for loan servicers, cos who
collect home-loan payments and are obligated to pay bondholders
every month even when they record collection shortfalls
(Reporting by Lance Tupper)
((lance.tupper.tr.com@reuters.net
lance.tupper@tr.com 646-223-5017))