NEW YORK, March 24, 2020 /PRNewswire/ -- MFA Financial,
Inc. (NYSE: MFA) (the "Company") announced today that in
recent weeks, due to the turmoil in the financial markets resulting
from the global pandemic of the COVID-19 virus, the Company and its
subsidiaries have received an unusually high number of margin calls
from financing counterparties, and have also experienced higher
funding costs in respect of its repurchase agreements. At the
close of business on March 23, 2020,
the Company did not meet its margin calls. Further, on
March 23, 2020, the Company notified
its financing counterparties that it does not expect to be in a
position to fund the anticipated volume of future margin calls
under its financing arrangements in the near term as a result of
market disruptions created by the COVID-19 pandemic. The
Company estimates that, as of March 20,
2020, the Company's aggregate obligations under its various
financing arrangements is approximately $9.5
billion.
In light of the events and conditions described above, the
Company is engaged in discussions with its financing counterparties
with regard to entering into forbearance agreements pursuant to
which each counterparty would agree to forbear from exercising its
rights and remedies with respect to an event of default under the
applicable financing arrangement for an agreed-upon period.
The Company cannot predict whether its financing
counterparties will enter into a forbearance agreement, the timing
of any such agreement, or the terms thereof.
Under the terms of the Company's financing arrangements, if the
Company fails to deliver additional collateral or otherwise meet
margin calls when due, the counterparties may demand immediate
payment by the Company of its aggregate outstanding financing
obligations and/or take ownership of the securities securing the
Company's financing obligations.
The Company has engaged Hunton Andrews Kurth LLP and
Quinn Emanuel Urquhart &
Sullivan, LLP as legal counsel and FTI LLC as financial advisor in
connection with its financings and related matters.
MFA Financial, Inc. is a real estate investment trust
primarily engaged in the business of investing, on a leveraged
basis, in residential mortgage assets, including residential
mortgage-backed securities and residential whole loans.
Forward-Looking Statements
When used in this report or other written or oral
communications, statements which are not historical in nature,
including those containing words such as "will," "believe,"
"expect," "anticipate," "estimate," "plan," "continue," "intend,"
"should," "could," "would," "may" or similar expressions, are
intended to identify "forward-looking statements" within the
meaning of Section 27A of the Securities Act and Section 21E of the
Exchange Act, and, as such, may involve known and unknown risks,
uncertainties and assumptions. Statements regarding the following
subjects, among others, may be forward-looking: the Company's
estimates of its outstanding borrowings under its financing
arrangements, uncertainties related to negotiations with the
Company's financing counterparties including with respect to any
forbearance agreement and the timing of any such agreement or the
terms thereof. Forward-looking statements are based on estimates,
projections, beliefs and assumptions of management of the Company
at the time of such statements and are not guarantees of future
performance. Forward-looking statements involve risks and
uncertainties in predicting future results and conditions. Actual
results and outcomes could differ materially from those projected
in these forward-looking statements due to a variety of
factors, including, without limitation, the Company's ability to
accurately estimate its outstanding borrowings under its financing
arrangements, uncertainties related to negotiations with the
Company's financing counterparties including with respect to any
forbearance agreement, the timing of any such agreement or the
terms thereof, changes in interest rates, changes in default rates,
changes in the yield curve, changes in prepayment rates, the
availability and terms of financing, changes in the market value of
our assets, general economic conditions, conditions in the market
for our residential mortgage backed securities, residential whole
loans, residential mortgage securities, MSR-related assets and
other assets, the timing and amount of distributions to our
stockholders, our ability to maintain our exemption from
registration under the Investment Company Act of 1940, as amended,
conditions in the real estate market, legislative and regulatory
changes that could adversely affect the business of the Company and
the ongoing spread and economic effects of the novel coronavirus
(COVID-19). Additional information concerning these and other risk
factors are contained in the Company's filings with the Securities
and Exchange Commission, including our most recent Annual Report on
Form 10-K and subsequent filings. All information in this press
release is as of March 23, 2020. The
Company undertakes no duty to update any forward-looking
statements to reflect any change in its expectations or any change
in events, conditions or circumstances on which any such statement
is based.
Investor Contact:
MFA Investor
Relations
212-207-6488
www.mfafinancial.com
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SOURCE MFA Financial, Inc.