SHartwell

Is Thornburg Mortgage Common Really Worth $3.88B?

Historical 5-year ARM to 5-year treasury spread has been 125 basis points. Today it's 309 basis points. Great for spread business companies.

If you assume the repo portfolio recovers (which everyone is implicitly assuming), the $1.2 billion in new debt can be levered up in a great spread environment. So earnings of $0.09 per share are difficult to reach, but not ludicurous.

This said, I still don't see much upside in TMA from here, particularly with the share overhang.