Two Harbors Investment Corp. Announces Sale of Portfolio of Non-Agency Securities
March 25 2020 - 4:12PM
Business Wire
Two Harbors Investment Corp. (NYSE: TWO) (the “Company”),
a leading hybrid mortgage real estate investment trust (REIT),
today announced that in an effort to prudently manage our portfolio
through unprecedented market volatility and preserve long-term
stockholder value, the Company has sold substantially all of its
portfolio of non-Agency securities, subject to customary settlement
procedures.
We believe the benefits of this sale include:
- Reducing the balances under our repurchase facilities by
approximately $2.0 billion.
- Eliminating the risk of margin calls associated with the
non-Agency residential mortgage-backed securities (“RMBS”)
portfolio, which have been unusually significant in size in this
volatile market environment.
- Removing the potential risk of not being able to roll the
funding on non-Agency RMBS as they become due.
After giving effect to the sale, our portfolio consists
primarily of Agency RMBS and mortgage servicing rights. We estimate
that:
- Our economic debt-to-equity is approximately 7.5x. The nominal
increase in economic debt-to-equity is a result of non-Agency
securities requiring less leverage than Agency RMBS. We continue to
be focused on carefully managing our leverage.
- Our book value is down approximately 55% quarter to date.
- Our liquidity position will remain strong and, given the
significant reduction in our margin call risk, we will continue to
be in a position to meet margin calls in the ordinary course.
- Our Agency and MSR portfolio is approximately $20 billion.
“In these unprecedented times, we remain acutely focused on
managing our portfolio and risk positioning to benefit our
stockholders over the long-term,” stated Thomas Siering, Two
Harbors’ President and Chief Executive Officer. “The sale of
substantially all of our non-Agencies demonstrates how we can
actively respond to changing economic conditions to reduce risk in
our portfolio. We have the expertise in place in mortgage credit
should the opportunity come about to again be active in that
market. Today, however, we feel confident in the opportunities in
pairing Agency RMBS and mortgage servicing rights, particularly as
spreads tighten in response to the Fed’s actions this week.”
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. Actual results
may differ from expectations, estimates and projections and,
consequently, readers should not rely on these forward-looking
statements as predictions of future events. Words such as “expect,”
“target,” “assume,” “estimate,” “project,” “budget,” “forecast,”
“anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,”
“believe,” “predicts,” “potential,” “continue,” and similar
expressions are intended to identify such forward-looking
statements. These forward looking statements involve significant
risks and uncertainties that could cause actual results to differ
materially from expected results.
Readers are cautioned not to place undue reliance upon any
forward-looking statements, which speak only as of the date made.
Two Harbors does not undertake or accept any obligation to release
publicly any updates or revisions to any forward-looking statement
to reflect any change in its expectations or any change in events,
conditions or circumstances on which any such statement is based.
Additional information concerning these and other risk factors is
contained in Two Harbors’ most recent filings with the Securities
and Exchange Commission. All subsequent written and oral forward
looking statements concerning Two Harbors or matters attributable
to Two Harbors or any person.
Two Harbors Investment Corp.
Two Harbors Investment Corp., a Maryland corporation, is a real
estate investment trust that invests in residential mortgage-backed
securities, mortgage servicing rights and other financial assets.
Two Harbors is headquartered in New York, New York, and is
externally managed and advised by PRCM Advisers LLC, a wholly owned
subsidiary of Pine River Capital Management L.P. Additional
information is available at www.twoharborsinvestment.com.
Additional Information
Stockholders of Two Harbors and other interested persons may
find additional information regarding the company at the Securities
and Exchange Commission’s Internet site at www.sec.gov or by
directing requests to: Two Harbors Investment Corp., 575 Lexington
Avenue, Suite 2930, New York, NY 10022, telephone 612-629-2500.
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version on businesswire.com: https://www.businesswire.com/news/home/20200325005739/en/
Investors: Margaret F. Karr, Investor Relations, Two Harbors
Investment Corp., 212-364-3663,
margaret.karr@twoharborsinvestment.com
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