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Newcastle Investment Corp. Message Board

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  • objective11 objective11 Sep 9, 2011 9:41 PM Flag

    DIVY per PPS

    IMO if divy not increased by at least 5c it is an indication that the current widening of credit spreads and overall developing problems with the global economy are adversely effecting nct...will be surprised if book value increases for 3q and may decrease while net interest income(NII)should increase substantially.

    Like others, I am expecting a divy announcement before the end of September.

    Unil the divy announcement, nct pps is clearly at the mercy of Euro debt mess...

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    • Other REITS in similar space have announced dividend cuts the past 2 days. IVR went from .97 to .80 and CYS went from .60 to .55. Granted the businesses are not exactly the same but the trend is there. Expecting AGNC to announce this week with NO dividend cut ($1.40) and NLY soon, again with steady dividend. These 2 companies weathered the 2008 meltdown unaffected.


      • 2 Replies to bobdbeck
      • Was not aware of IVR and CYS divy reductions or familiar enough with their businesses to understand why the cuts were made and if the cuts were expected before the current market declines.

        There are alot of moving parts with nct so cannot rule anything out, but hard to see a scenario where the divy would be cut,NII would have to decline, I am still expecting an increase.

      • I would be very careful comparing IVR, CYS or AGNC to NCT. The former invest all or nearly all of their capital in Agency mortgages and rely exclusively on short-term repo funding with recourse to finance their portfolios. NCT currently invests the vast majority of their capital in a variety of non-Agency mortgage assets and finances that primarily with CDOs or other securitization debt that is non-recourse and duration matched. These are very different business strategies that create different risk/reward opportunities for investors. The bottom line is I would not extrapolate current dividend trends in the Agency mREIT space to the non-Agency mREIT space.

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