..Washington Federa, parent company of Washington Federal, announced that it has taken steps intended to reduce the company's interest rate risk and improve its future earnings potential.
In the preceding ten days, the company sold $2.4M of fixed rate mortgage-backed securities for a pre-tax gain of $95 million.
The securities sold yielded an annualized 3.22% in the month of July 2012. In the same period, the company pre-paid $876M of long term debt at a pre-tax loss of $95M. The weighted average rate on the retired debt was 3.94%. In related transactions, the Company also purchased a mix of short and longer term assets totaling $1.7 billion with an anticipated weighted average yield of 1.85%, and restructured an additional $100M of long term debt to lengthen maturity and reduce the weighted average rate from 4.04% to 3.33%.
An ongoing review of the investment portfolio and long-term debt likely will result in additional transactions of a similar nature.