Mortgage REITs bounce after brutal selloff
25/03/2020 14:58
** Mortgage REIT stocks rising after getting savaged on Tues
as margin calls multiply urn:newsml:reuters.com:*:nL1N2BH22G
** Dow Jones Mortgage REIT index .DJUSMR jumps ~11% and
iShares Mortgage Real Estate ETF REM.N leaps 12%. This as S&P
500 .SPX is up 0.2%
** Late Tues, the Fed hired Blackrock BLK.N to help
execute mortgage-backed securities (MBS) purchases announced
this week as part of central bank's aggressive efforts to shore
up the U.S. economy urn:newsml:reuters.com:*:nL1N2BH2CL
** MFA Financial MFA.N is best performer up ~120% and
among most actively traded stocks on Weds. Shares plunged ~87%
Tues after co became the latest to warn about not being able to
meet near-term margin calls due to market disruptions created by
the COVID-19 pandemic urn:newsml:reuters.com:*:nL1N2BH22G urn:newsml:reuters.com:*:nL1N2BH0M1
** Meanwhile, Apollo Commercial Real Estate Finance ARI.N
up 46% after it issues letter to stockholders urn:newsml:reuters.com:*:nGNX6rLZB and
Redwood Trust RWT.N up 36% after its says has $300 mln in
unrestricted cash, has met all margin calls and reduced
short-term borrowing by 50% urn:newsml:reuters.com:*:nPn4D0Tc4a
** Two Harbors TWO.N up ~30%, industry heavyweight Annaly
Capital Management NLY.N up 10%
** RBC in note to clients says given current market
conditions, favors NLY and TWO as both have portfolios
predominantly composed of agency MBS, "which have no credit risk
(as the principal is backed by the GSEs), and which should see
the most benefit from the Fed’s recent actions."
** Late Tues, TWO suspended its Q1 2020 dividends, though co
says has met all margin calls and confident it will satisfy
future margin calls in near term; co also says de-levered its
portfolio to a debt-to-equity ratio in low-to-mid 6s
urn:newsml:reuters.com:*:nBw7Mrlw8a
(Reporting by Lance Tupper)
((lance.tupper.tr.com@reuters.net
lance.tupper@tr.com 646-223-5017))