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Ellington Financial to acquire Arlington Investment to boost scale, liquidity

May 30, 2023 7:25 AM ETArlington Asset Investment Corp. (AAIC), EFCBy: Liz Kiesche, SA News Editor30 Comments
Connected puzzle pieces with the acronym M&A. Merger and acquisition in business


Mortgage REIT Ellington Financial (NYSE:EFC) has agreed to acquire Arlington Asset Investment (NYSE:AAIC), another mortgage REIT, in a deal that should increase scale and liquidity, the companies said Tuesday.

In addition, Arlington's (AAIC) portfolio aligns well with Ellington Financial's

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Comments (30)

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Keep it Country profile picture
Thank you Scott and Colorado. Stayed long a strong for the duration on this call.
@Keep it Country definitely the best outcome available in a bad situation. I wonder what happens with the preferreds with their cumulative unpaid dividends post acquisition?
@parity AAIC has been paying all dividends on the preferreds. They only stopped for the commons which they do not owe
@Topcat1 Thanks. I am getting this confused with some other company.
YEAH! finally a good news
elvisbeatlesfan2 profile picture
Congratulations to Scott Kennedy and members of The REIT Forum that followed Scott’s AAIC trades. It took awhile but finally a great payday.
Ludicrous Speed profile picture
@elvisbeatlesfan2 Definitely kicking myself for not hanging on but I got out slightly above even--- after the shareholder vote failed a while back, I just couldn't take it anymore and wanted to free up some cash.
elvisbeatlesfan2 profile picture
@Ludicrous Speed I also sold most of my common shares but held all of my notes and preferred shares. I plan to hold my common through the closing and receive the cash and EFC shares but that’s subject to change. It will be interesting to see what Scott does with his shares.
Congratulations to all that didn’t capitulate.
Sigh of relief!

Holding AAIC was the ultimate pain trade.
petergo007 profile picture
well, in the meantime until the deal closes, we earn interest on our AIC notes.

Expect them to redeem them at par $25

@petergo007 I bought a boatload on Friday... Really lucked out there
@petergo007 i thought it acted off on friday. i was actually looking at adding more early last week. oh well.
Citadel West profile picture
@petergo007 there's nothing in the 'description of notes' section of the AIC prospectus about change of control requiring a redemption. While this acquisition is generally good news for note investors, I would not be expecting an early call
Anthonyhai2003 profile picture
Finally, I can get rid of my AAIC shares….. 😭
My AAIC.B, C will be early redeemed?
AnimeSnoopy profile picture
Doubt it. Probably you get a tender for $17 or so and after the deal finalizes they delist it for those who didn't accept.
If they are real rockstars like at BAM, they spin off the delisted pfd's into an over-levered entity which they then bankrupt to dispose of the debt.

Such is the life of a pfd investor ; )
@AnimeSnoopy I don't own PFDs here but I doubt EFC delists the PFD and does all that shady stuff. Some people care about their reputation, and top guys running Ellington have earned it over a few decades.
AnimeSnoopy profile picture
Good luck buddy.

BAM is a bunch of nobodies for sure.
They definitely don't manage $800 billion or anything lol.

But seriously good luck... You're gonna need it.
Unfortunately I say this as someone who has obviously been screwed.
The regulators are to blame for making 90% of pfd's uninvestable due to such loopholes.
You just have no recourse and they have no reason not to do it.
AnimeSnoopy profile picture
You can buy AAIC for $4.20 right now.. hehe...

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