American Capital stung by mREITs

Net operating income of $0.16 per share compares to $0.21 in Q2 and $0.27 a year ago. Net asset value of $19.54 per share is up from $19.28 at the end of Q2 and up 12% Y/Y. Compares to today's close of $14.32.

Not immune to the difficulties of the mortgage REIT sector, ACAS takes a writedown of $119M due to a reduction in projected management fees from American Capital Agency (AGNC) and American Capital Mortgage (MTGE). NOI for the entire quarter was $47M.

$218M of cash from realizations received during quarter, including $37M from European Capital, which also paid down $79M of its unsecured credit line for a total of $116M in cash proceeds.

New commitments of just $62M with weighted-average effective interest rate of 10.8%, up 40 bps from Q2. "Though we reviewed and bid on a considerable number of sponsor finance and buyout opportunities, originations were low this quarter," says the firm's Gordon O'Brien.

Non-accruing loans fell $76M to $245M as two portfolio companies moved into improved performance bucket. Total loans on non-accrual are valued at 56.5% of cost, down 13.7% from Q2. Estimated loss on total loans at cost of $130M, or 8.2%. NOI of $0.16 was reduced by $0.10 due to net impact of investments added/removed from non-accrual status.

Company expects more action in Q4 and has already closed the recapitalization of CML while merging it with AAIPharma.

Buybacks: 13.4M shares at average price of $13.11 each. Since start of program in August 2011, company has repurchased 83.8M shares (24% of float) at average price of $11.02.

CC tomorrow at 11 ET.

ACAS +0.2% AH.

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