Probably a good idea. I mean, looking forward, how many financial institutions reaped benefits on refinancings, only to be now left with a large pool struck at low interest rates? I remember Fannie Mae had a problem in their past concerning hedging against rising interest rates. One of my scepticisms about CSNT concerned the benefits they reaped on the refinancing boom but the ramifications going forward. It would appear the ramifications have somewhat gone away. We can only hope that they put the new capital to good use.
Good analysis. If they can free up capital that is about to become less productive (despite high current income production) and yet still reap some income from the "tail" in the pipeline, they seem positioned to enter the next phase of inevitably higher rates. Let's hope that it succeeds.