Hey Jtrader. is it any worry the yield is only 5.4%.
I'm mainly saying that in the eye of rising rates??
I don't follow MLP's super closely in general either so I haven't been watching how the sector based has been performing wise against interest rates.
The last MLP secondary posted on here (BBEP) was a stud.
I still have 2,000 shares @ 18.27.
It's at 19.72 which is a 7.91% gain.
I may hold on to them since they are converting to monthly dividends which I like.
I'm waiting to see what their monthly dividend will be like.
Found the news release at the company Web site.
New York, December 18, 2013 – Two Harbors Investment Corp. (NYSE: TWO) today announced that its wholly owned subsidiary, Matrix Financial Services Corporation (“Matrix”), has entered into an agreement to acquire a bulk pool of mortgage servicing rights (“MSRs”) from Flagstar Bank, FSB (“Flagstar”), a subsidiary of Flagstar Bancorp, Inc. (NYSE: FBC). Under the agreement, Flagstar will sell to Matrix the MSRs on residential mortgage loans having an aggregate unpaid principal balance of approximately $40.7 billion, for the purchase price of approximately $500 million. The underlying pool of mortgage loans is comprised of Fannie Mae and Ginnie Mae loans, originated primarily after 2010. The acquisition is expected to close on or about December 31, 2013, and is subject to customary closing conditions.
Hi Sho261. I would bet the farm they will not levege up just yet.
Per my prior post.. not that much is actually tapered.
There is still to much risk to highly leverage up.
But probably soon if more tapering happens. ; )
You could be very right but I would not be surprised if we have one more weak Q... then like a stretched rubber band watch this pop back.. more leverage, higher MBS prices, increasing BV, MSR's kicking in how can one not be bullish going forward? Also, I don't think the 10 yr gets any higher than 3.5% in 2014..
Why do you think that?
5 Billion less in MBS isn't much.
They are spending their prepays and principle payments on MBS as well.
I can't find in the net what they are really buying per month right now but it wouldn't surprise me if it's in the 60 Billion (+/- 10 Billion) range.
The cut is quite small.
"Here is the stupid thing. In past months, any hint of QE tapering sank the market . Today, QE tapering is a reality. And the market rallies hard. WTH!"
I was discussing this with co-workers at lunch just now.
They thought because the taper was soft, the market was happy.
higher duration gap, can take on more risk.. more leverage now that the majority of the move higher in rates is over.. and the added benefit of the MSRs... so higher ROE, higher dividend going forward.. if not this quarter... then next.
Here is the stupid thing. In past months, any hint of QE tapering sank the market . Today, QE tapering is a reality. And the market rallies hard. WTH!
Cannot disagree.. Now is the time to get back into non agency reits..
Sentiment: Strong Buy
Yeah,makes a lot of sense, huh? After all, pre-pay risk is off the table and now MTGE can start the leverage train again. Buy high sell low.. sound familiar?
xxavatarxx - MWE did a SPO today. 4.75 million shares. Volume is solid today (around 4.8 mm as I type this). It and MLP sector in a bit of a downtrend as of late but nothing too bad. MLP "dividend season" follows the mReits so they start declaring mid-January.
I started a position today at 62.95.