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Agency REITs Look to Preferred-Equity Raises Instead of Common-Equity Raises: Expert Analyst Daniel Altscher Discusses How REITs are Raising New Capital with The Wall Street Transcript

67 WALL STREET, New York - June 24, 2013 - The Wall Street Transcript has just published its REITs Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Acquisition and Financing Costs - Pricing Power Outlook - Residential and Commercial REITs - Inexpensive Access to Capital - Apartment, Lodging, Self-Storage and Office REITs

Companies include: Annaly Capital Management, Inc (NLY), Anworth Mortgage Asset Corpora (ANH), MFA Financial, Inc. (MFA), NorthStar Realty Finance Corp. (NRF), National Retail Properties, In (NNN), General Electric Co. (GE), CapLease, Inc. (LSE), Entertainment Properties Trust (EPR) and many more.

In the following excerpt from the REITs Report, an expert analyst discusses the outlook for the sector for investors:

TWST: You mentioned earlier CYS and their new equity issuance. It seems a lot of the mortgage REITs have been raising new capital in the past several months. Have the offerings overall been successful, and do you anticipate this sort of activity continuing?

Mr. Altscher: Yes. Just to be clear, the CYS equity raise was a preferred-equity raise, not a common-equity raise. The agency mortgage REITs - it's a little bit tougher to go out there and raise common equity, because for a lot of these names the stocks are not trading above book value.

So to go out and raise common equity is difficult, because you don't want to dilute book value. That's why, I think, you've seen a name like a CYS do a preferred-equity issuance. There's another name in my space, which I don't cover, that recently did a preferred-equity issuance, too.

I think it goes back to what I was saying before, which is that you are seeing the opportunity there now that RMBS has recently sold off a bit; these names are going to see an opportunity to go out and make new investments. That's one of the reasons why I like CYS right now; they're early to the game, if you will. They came in and raised capital at a very good time. Doing it in late April was very good given the last two weeks we've seen with the selloff in MBS. They've been early to the game, so for other names that have not yet done that, they will be laggards in terms of putting new money to work.

A name like Annaly, you heard their CEO say, "We think we're going to see opportunities soon, when the Fed starts to exit or it becomes apparent to the market that the Fed will, or it affects pricing when the Fed is going to start exiting." So they haven't been as active in raising new capital recently, but down the road, I think if you start to see spreads continue to widen, you'll start...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.