The Fed is buying MBS's which drives up their value. MTGE has billions of dollars in MBS's so their book value is increasing and the stock price reacts to that.
The purpose of an SPO is to raise money. One of the threats to REITs is prepayment risk which gives them a slug of money that they are forced to reinvest at a time when the yield curve is depressed. Does it make sense to do an SPO at this time?
Certainly, they appear to be signalling they will do one. Maybe they want to buy more MBS's BEFORE the Fed drives up their value.
One of the major ratings agencies downgraded a slew of Agency REITs but not the hybrid REITs. What do they know?
For years the REIT sector has been my "safety play", hated by analysts buy reliably returning double-digit gains. Now it appears they are becoming a bit less safe.
It was not my " safety play " but meal ticket earning 19-20 % on AGNC,etc. for several years. Hybirds make more money managed by Kains brains. Ray and Salty have it down..lets rock and roll because I can't live keeping it under the mattress or in the local bank P.S. You did not listen to Analyst then so why start now !
the hybrid mREITs can now take advantage of the Fed's bid in agency MBS and sell them for a profit (which they will have to pay out in a dividend if it increases their taxable earnings) and reinvest the proceeds in higher spread nonagency and CMBS. Eventually, this leads to an increase in demand for nonagencies and CMBS and their price goes up, and the repo lenders get more comfortable extending the leverage on them maybe from around 4 now to 5. That should enable the hybrids to earn mid teens returns at least. Helps if a hybrid can do an spo and buy more nonagencies instead of waiting for the proceeds from sales of agencies.
At least that is what I think the plan is. We'll see if it happens.