The new dividend would presumably be at least .25 a quarter and probably more to support a better than 14 price, since that was turned down. The idea of CXS (in my opinion) is to gradually increase the dividend and this move puts them in a new league to get better deals--the bigger ones are better if one has the discerning knowledge. NLY is greedy (like NY in general, but that is the capitalist way), and they still have to support their choices! Our choice is to get on the train, hang on, or don't get on or sell) I've just climbed aboard!
I think the management will try to keep the dividend amount the same or increase slowly. Here is how it works. The portfolio acquired from BCS will mature as each quarter goes. They can book the capital gains from the matured securities, assuming no loss due to re. The capital gains can partially make up for the low interest coupons received from these loans. Alternatively, if these assets are mostly super duper AAA, they can borrow extra fund from bank to capitalize against these assets to buy more CMBS assets to pony up the dividends.
However, the book value cannot grow much organically. If everything works out miraculously, the share price will increase much more than the book value as the security becomes more liquid and dividend rate is higher. At that point, they can more secondary offers to increase the book value.
How do they book capital gains? I noticed in the prospectus that the new assets are marked down about -20%. At maturity, the full loan amount is due, so they would gain +25% (1/0.8) on their average holdings? Is that how it works?