MARKET CURRENTS
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MARKET CURRENTS
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Wednesday, June 19
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6:17 PM Some S&P 600 changes: CalAmp (CAMP) is replacing Palomar Medical as of the June 24 close, WageWorks (WAGE) is replacing National Financial Partners as of the June 25 close, and Associated Estates (AEC) is replacing Websense as of the June 25 close. Palomar, NFP, and Websense are all being acquired.camp. CAMP +1.5% AH. WAGE +1.5%. AEC +3%. Comment!
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4:41 PM Ashford Hospitality Trust (AHT) commences a secondary of 11M shares with proceeds to be used for the planned spinoff of Ashford Hospitality Prime announced Wednesday. Shares -0.75% AH. (PR) Comment!
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4:27 PM As previously tipped, Chimera Investment (CIM) holds it payout steady, declaring a Q2 dividend of $0.09/share for an annualized yield of 11.7%. It's possible at least some portion of that dividend is return of capital, rather than ordinary income or capital gain, says the company, which also estimates economic book value as of March 31 of $3.08/share vs. an estimated $3.04/share in Dec. 31 (the company is behind on its Qs, so these remain estimates). 2 Comments
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4:22 PM Annaly Capital (NLY) cuts its payout 11.1%, declaring a Q2 dividend of $0.40/share for an annualized yield of 12.3%. Shares +0.5% AH. (PR) 2 Comments
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3:48 PM Blackstone (BX -1.4%) announces the hiring of General Wesley Clark as a senior advisor on energy investments, where he will provide his expertise to the P-E firm's $2.5B energy-dedicated buyout fund and the $16.7B diversified P-E fund. Clark will also get a board seat at Fisterra Energy - a Blackstone company formed this year to develop power projects in Latin America, Europe, and the Middle East. Comment!
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3:42 PM Attempting to alleviate any shareholder concern over accelerated debt repayments, Corvex and Related pledge to offer to buy 51% of CommonWealth REIT's (CWH -0.7%) outstanding debt should they win the ouster of the company's entire board. 1 Comment
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12:43 PM Bank of Ireland (IRE +0.6%) is upgraded to Hold from Sell at Deutsche Bank, perhaps finding the price enticing after an 11% decline over the past few sessions (helped by a Goldman downgrade). Comment!
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12:22 PM State Street (STT -0.1%) shakes up its asset management unit - State Street Global Advisors - with global equities chief Alistair Lowe set to leave the company at year's end. SSgA will combine its cash and fixed-income lines under Steve Meier, the current CIO of cash who will become CIO of fixed-income, currency, and cash. (PR) Comment!
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11:51 AM Schwab's (SCHW) cost-cutting is paying off as its U.S. Broad Market ETF (SCHB) has about doubled to $2B in AUM since cutting its expense ratio 33% to 0.04%. Competitors like Vanguard's VTI and iShares' IWV cost 0.05% and 0.20%, respectively. The SCHB - along with the other 14 ETFs Schwab cut fees on - is likely now a loss leader, but the company expects to gain from expanding the "totality of the relationship" with clients. 1 Comment
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11:19 AM Triangle Capital (TCAP -1.1%) updates its investor presentation as its annual analyst and investor meeting gets underway. Why TCAP as opposed to other BDCs? Internally managed BDCs like TCAP, MAIN, and HTGC have lower relative G&A expenses and deliver better returns to owners. Why BDCs (BDCS) over regional banks? Fewer banks with far more conservative capital structures are leaving plenty of market share for BDCs to pick up. 1 Comment
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10:22 AM The positives from a steeper yield curve outweigh the negatives for small and mid-cap banks, says Credit Suisse. Banks with larger reinvestment portfolios like Signature (SBNY) and Webster (WBS) will benefit from higher reinvestment rates. As higher rates come with stronger economic growth, C&I-heavy lenders like Columbia (COLB) and PrivateBancorp (PVTB) should gain. At risk as higher rates lead to a slowdown in mortgage banking are Umpqua (UMPQ), Associated (ASBC), and First Republic (FRC). At risk from core-deposit outflows: Susquehanna (SUSQ), BankUnited (BKU), and East West (EWBC). 1 Comment
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9:49 AM Ellington Residential Mortgage REIT (EARN) declares its first dividend since coming public last month, a payout of $0.14/share. The company estimates book value as of May 31 of $19.36/share vs. the pro-forma post-IPO book value of $19.80 (shares are at $17.89). "Our hedging methodology was successful in largely offsetting the impact of the dramatic interest rate rise that we saw in May ... despite the magnitude of the drops in the agency RMBS market, we were able to limit the decline in book value." EARN is managed by the same team behind Ellington Financial (EFC). Comment!
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9:06 AM Bank of America (BAC), JPMorgan (JPM), Citigroup (C), and Wells Fargo (WFC) have failed to comply with parts of the $25B national mortgage settlement, according to Joseph Smith, the independent monitor appointed to oversee the process. "We still have work to do on the loan modification process," he says. His findings jibe with anecdotal reports and comes as the NY AG has signalled his intention to sue the banks over violations. 13 Comments
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8:34 AM KKR is among the bidders for a majority stake in Saudi fast food chain Kudu, reports Reuters. The company operates over 200 restaurants in the kingdom and could be valued in the area of $260M-$390M, according to a source. Carlyle Group (CG) was also reached out to for a bid, but has reportedly declined to participate. 1 Comment
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8:20 AM Is it a one-month wonder or is trading activity materially picking up at the retail brokerages? E*TRADE (ETFC) reports a 15% monthly and 11% yearly increase in Daily Average Revenue Trades (DARTs) in May, a big change from recent reports which have seen annual declines. An update on the loan portfolio finds delinquencies off 14% in the two months ending on May 31. (PR) Comment!
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7:59 AM "It was the absolute worst time to raise money," says a portfolio manager, commenting on mREITs (REM) who "doubled-down" in Q1 rather than turn money away just ahead of their worst quarter since the financial crisis. Most mREIT managers, of course, are paid based on AUM, giving them an incentive to raise capital at pretty much any time. Firms such as Anworth (ANH) and MFA Financial (MFA) have compensation packages more tied to profits and chose not to join the capital-raising party this year. Comment!
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7:37 AM Starwood Property Trust (STWD) announces Archetype Mortgage Capital - a commercial property loan origination platform acquired as part of the LNR purchase - has changed its name to Starwood Mortgage Capital. (PR) Comment!
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7:07 AM Buy-rated AIG's price target is hiked to $56 from $52 by Deutsche's Joshua Shanker after meetings with Peter Hancock, the CEO of the insurer's P&C business. Shanker is confident AIG is on track to achieve a 90-95% combined ratio by 2015. A dividend - "modest," but more than "nominal" - and continued share repurchases are looking more certain for 2013. Shares +0.5% premarket. Comment!
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6:56 AM American Capital Agency (AGNC) gains 2.5% premarket after cutting its quarterly dividend 16% to $1.05/share, a 16.6% annualized yield based on last night's close, suggesting the cuts aren't over with. SA Pro's Dane Bowler a month ago suggested an annual payout of about $3.50 as a "sustainable" level for the dividend. (PR) 9 Comments
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2:52 AM The SEC plans to alter the somewhat cozy relationship it has with Wall Street and force companies to admit wrongdoing in some settlements or face the risk of going to court instead. That's not to say that the agency will abandon the "no admit, no deny" approach, new Chairwoman Mary Jo White said yesterday, but it does mark her first big policy change. It comes after the likes of Judge Jed Rakoff rejected the SEC's $285M deal with Citigroup because of the "no admit, no deny" clause in the deal. 1 Comment
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