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Anthracite Capital, Inc. Message Board

  • kafirpigdog kafirpigdog Mar 8, 2008 7:30 AM Flag

    It's about cash

    The only fundamental that matters right now is if AHR has enough cash to handle any margin calls that have or may happen.
    Thornberg is dead despite good credit perfromance, "Our portfolio of mortgage-backed securities has exhibited exceptional credit performance and comprises loans that are among the most solid in the industry," said Chief Executive Larry Goldstone. "Quite simply, the panic that has gripped the mortgage-financing market is irrational and has no basis in investment reality."
    Wrong Goldstone, the investment reality is your repo lenders don't trust the asset values backing your paper.
    The agency mreits cratered because of Carlyle and their assets are backed by fannie and freddie.
    AHR needs to conserve cash and play defense, they should cut/eliminate the dividend, conserve the $76 million that would be paid out and the common shares would rise.

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    • Dreedva...As far as I'm concerned your rationale is welcome here...We are entering unchartered waters and it will require a creative management team.....2008 will be a difficult year for all financials and the survivors should come out of it with great opporunities..

    • The problems that TMA is experiencing are being used-wrongly-as an indicator of possible problems for AHR, in my opinion.
      First, TMA foolishly became involved with Alt-A mortgages, which were essentially no-doc or low documentation loans. When things were going well, people were willing to tolerate this type of collateral. Now they are not!!! AHR does not make loans without careful analysis ahead of time.
      Second, AHR is managed by BlackRock, one of the 10 largest asset managers in the world (equal in size to VANGUARD). Let's face it: If a bank is going to extend credit to a very limited group of supplicants, those who are in a position to do a great deal of business with the bank in the future are going to get priority. I really don't think AHR is going to have any serious problems unless they start to experience a LOT of defaults.

    • TMA is not a good proxy for AHR. To put TMA into perspective, TMA had an equity base of about $600m yet they had almost $10bn in Repos alone. AHR has about the same amount of equity yet they have $110m in repos. TMA had over $30bn of total assets on that equity base of $600m. AHR has about $5bn of assets vs. its $600m equity base.

      TMA and its ilk are broken relics from a time when risk management was suspended in favor of cheap, abundant liquidity. That type of leverage TMA et al leveraged is unforgivable.

    • Sadly, I think you're right kafipigdog. The payment of a dividend at the expense of liquidity would be irresponsible. Now is not the time to appease stockholders in the short term while putting them at peril in the long term. Giving up .30 in dividends is a small price to pay. I'd even forego my preferred dividends to assure AHR's survival in these shark-infested waters. A few weeks ago TMA was still considered one of the few remaining solid MREITs, and now.....

    • This market is just wrong about AHRs value. It's just that simple. Value investors are circling, you should be too!If you feel there is panic in the market and you follow this company closely, then you know the answers already. I see large opportunity in Ahr. Tuesday is judgement day!

    • Many companies have done this and it was the right thing to do for them(Chiquita) ...as an example. Two reasons why this would not work for AHR; first, because the company has already promised the dividend for 2 years, and the company's management already knows who their stockholders are. It would be twice as bad to discontinue the dividend, then to pay this amount out and maintain order..A viable solution for some ,just not AHR.

    • your nuts, they will pay 30 cents and will tell us this next week.