And I feel "compeled" to recommend that anyone holding this or any other non-agency mreit go to markit.com and check out the price action on the PRIMEX the last few days. The LEAST of your problems are repos...
And, BTW, any coincidence that this Barclays sell-side analyst issues this recommendation simultaneous to this Bloomberg blast (do you smell the desperation) from a Barclay's trader:
"PRIMEX - OVER THE LAST 2 DAYS PRIMEX HAS REALLY SOLD OFF AND IGNORED THE RALLY IN STOX, CREDIT, AND CMBX. HARD FOR ME TO PINPOINT A REASON WHY ALL THE SUDDEN HATE FOR THE SECTOR BUT I THINK THAT AT THESE LEVELS WITH A 442BP AND 458BP COUPON AND 4-6 YR DURATION ITS WORTH DIPPING YOUR TOE IN THE WATER. IF YOU HAVE ANYTHING TO DO PLS LET US KNOW."
As the MARKIT web site illustrates, the decline in the PRIMEX is from around 108-110 to 100-104. Want to know why? It's not because credit is getting worse, but rather that these are premium bonds that are much more likely to get refinanced because mortgage rates have fallen and these are taken out by highly eligible prime borrowers. In refi booms these premium bonds head towards par (why would anyone pay 108 for a bond that is highly likely to pay off at par very soon?!). IVR doesn't hold premium bonds in the non-agency space. In fact, high prepayment speeds in non-agencies are good news for IVR given that their holdings are all discount bonds (which are getting paid at par sooner). Let's get our facts straight and please stop putting out alarmist posts that don't correspond well to IVR's actual holdings.