AG Mortgage Investment Trust, Inc. Provides Updates as of March 27, 2020.
March 27 2020 - 6:34PM
Business Wire
AG Mortgage Investment Trust, Inc. (NYSE: MITT) (the “Company”)
announced today that it is providing updates on several matters
pertaining to the Company.
Update on Agency MBS Portfolio
In an effort to prudently manage its portfolio through
unprecedented market volatility and preserve long-term stockholder
value, on March 23, 2020 the Company completed the sale of the
Company’s portfolio (the “Agency Portfolio”) of residential
mortgage-backed securities issued or guaranteed by a U.S.
government-sponsored entity (“Agency MBS”). After satisfaction of
an aggregate of approximately $880 million of repurchase financing
obligations with respect to the Agency Portfolio, the transaction
netted the Company approximately $38 million of cash proceeds
through T+0 settlement. After giving effect to the sale of the
Agency Portfolio, the Company no longer owns any whole pool Agency
MBS and as of close of business on March 27, 2020, the Company has
approximately $78 million of cash and cash equivalents on hand.
Update on Financing Arrangements
On March 24, 2020, the Company received written notices from
certain affiliates of Royal Bank of Canada (“RBC”) alleging that
events of default had occurred with respect to various financing
agreements. The Company disputes RBC’s notices of events of default
and filed a suit in federal district court in New York describing
the wrongful conduct by RBC and seeking both to enjoin RBC from
selling the Company’s collateral securities as well as damages. The
Company has also received notifications from several additional
financing counterparties of alleged events of default under their
financing agreements, and of certain of those counterparties’
intentions to accelerate the Company’s and such subsidiaries’
performance obligations under the relevant agreements.
Under the terms of the applicable financing arrangements, if the
Company fails to deliver additional collateral or otherwise meet
margin calls when due, the financing counterparties may demand
immediate payment by the Company of the aggregate outstanding
financing obligations owed to such counterparties, and if such
financing obligations are not paid, may sell the securities and
apply the proceeds to the Company’s financing obligations and/or
take ownership of the securities securing the Company’s financing
obligations. The Company may also be liable for a shortfall if the
proceeds from such sale or value of such securities is less than
the relevant financing obligation.
As previously announced, on Monday, March 23, 2020, the Company
notified its financing counterparties that it was not in a position
to fund the margin calls it received on March 23, 2020, and that
the Company did 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.
Since March 23, 2020, the Company and several of its
subsidiaries have received notifications from several financing
counterparties of alleged events of default under their financing
agreements, and of certain of those counterparties’ intentions to
accelerate the Company’s and such subsidiaries’ performance
obligations under the relevant agreements. The Company and its
subsidiaries have disputed certain of those notices. However, in
the event of a default under one or more of those agreements,
financial and other obligations under such agreements, and in some
cases the Company’s obligations as a guarantor, may be accelerated
and the counterparties may take ownership of the securities pledged
to secure the financing obligations by the Company or its
subsidiaries. Certain counterparties have informed the Company that
they have sold the securities pledged to secure the financing
obligations. The Company and its subsidiaries also may be subject
to penalties under those agreements and may suffer cross-default
claims from its other lenders.
The Company continues to engage 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.
Update on Dividends
On March 27, 2020, the Company announced that the Board has
approved a suspension of the Company’s quarterly dividends on the
Company’s common stock, the Company’s 8.25% Series A Cumulative
Redeemable Preferred Stock, the Company’s 8.00% Series B Cumulative
Redeemable Preferred Stock, and the Company’s 8.000% Series C
Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock,
beginning with the common dividends that normally would have been
declared in March 2020 and the preferred dividends that would have
been declared in May 2020. The Board’s decision reflects the
Company’s continuing focus on conserving capital and improving its
liquidity position during the current market volatility.
ABOUT AG MORTGAGE INVESTMENT TRUST, INC.
AG Mortgage Investment Trust, Inc. is a hybrid mortgage REIT
that opportunistically invests in and manages a diversified
risk-adjusted portfolio of Agency RMBS and Credit Investments,
which include Residential Investments and Commercial Investments.
AG Mortgage Investment Trust, Inc. is externally managed and
advised by AG REIT Management, LLC, a subsidiary of Angelo, Gordon
& Co., L.P., an SEC-registered investment adviser that
specializes in alternative investment activities.
FORWARD LOOKING STATEMENTS
This press release includes “forward-looking statements” within
the meaning of the safe harbor provisions of the United States
Private Securities Litigation Reform Act of 1995 related to the
Company’s outstanding indebtedness and the status of our ongoing
discussions with our financing counterparties, among others.
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, 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 Agency RMBS, Non-Agency RMBS, ABS and CMBS securities, Excess
MSRs and loans, our ability to predict and control costs,
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 SEC,
including its most recent Annual Report on Form 10-K and subsequent
filings. Copies are available free of charge on the SEC’s website,
http://www.sec.gov/. All information in this press release is as of
March 27, 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200327005556/en/
AG Mortgage Investment Trust, Inc. Investor Relations
(212) 692-2110 ir@agmit.com
AG Mortgage Investment (NYSE:MITT)
Historical Stock Chart
From Mar 2024 to Apr 2024
AG Mortgage Investment (NYSE:MITT)
Historical Stock Chart
From Apr 2023 to Apr 2024