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American Capital Agency Corp. Message Board

  • obreck3 obreck3 Jul 17, 2008 1:07 PM Flag

    Fannie Mae Debt

    What exactly is Fannie, Freddie and Ginnie debt trading for?

    Is AGNC trading at a significant discount to those numbers?

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    • - Agency RMBS debt just traded for about 30 bps over treasuries at the short end - i believe it was 30 day and 90 day money.

      - Yes - AGNC is trading for about 84% of book by my calculation. IPO proceeds were used to purchase the RMBS portfolio a month and 1/2 ago at similar spread to treasuries. $15.65 current sp divided by $20 IPO equals 78% plus %6 issuance cost equals 84%.

      - Remember too that AGNC was started up to adress a dislocation in the market between the short and long end mortgage spreads. Agency paper was discounted greatly already when it was purchased after the IPO, and then to get the same AAA+ paper for a 16%+ disount the last few days.

      - AGNC IS A LAYUP INVESTMENT FOR YIELD OR CAPITAL GAIN. 25% YIELDS DO NOT LAST LONG IN ANY MARKET.

      The govt may let Fannie and Freddie go to zero, but even the BOND MARKET IS SAYING AGENCY RMBS DEBT IS FINE.

 
AGNC
19.70-0.11(-0.56%)Sep 23 4:00 PMEDT