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To: Paul Kern who wrote (107268)3/30/2012 5:02:20 AM
From: Elroy
of 118206
 
Do you know why an mREIT would issue preferred stock rather than raise capital through a normal secondary offering?

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To: Elroy who wrote (107270)3/30/2012 6:35:26 AM
From: Paul Kern
of 118206
 
Decisions like that are above my pay grade.

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To: Elroy who wrote (107270)3/30/2012 7:09:58 AM
From: Neero
of 118206
 
Not sure about the details, but on the surface, wouldn't raising capital at 8% make more sense than raising the same amount of dollars through another offering of common and paying ~16% on it?

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To: Dale Baker who wrote (99153)3/30/2012 9:48:38 AM
From: RumbleFish
of 118206
 
Good timing on the AVNDF sale. They just cut the monthly div from .045 to .035. Stock down 13% as I write.

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To: Neero who wrote (107272)3/30/2012 12:09:44 PM
From: Elroy
of 118206
 
It seems so, but then why has AGNC done something like 5 secondaries in the past year?

NLY is redeeming its preferreds, AGNC is issuing them. Just wondering why...

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To: Elroy who wrote (107274)3/30/2012 12:29:22 PM
From: deeno
of 118206
 
I think I could see it. its all about leverage. By issuing PFD's and being able to leverage the proceeds you are cementing a long term cost of borrowing and buying what are likley to be long term obligations. I would expect a spread. that spreads income would be distributed to current (undiluted) shareholders. So you increase cash flow to current owners. Now the question would be why do you want to buy the PFD's? Again I would guess a stable income and maybe security when these things all "deleverage".

You might redeem these things if your leverage is working against you or the bonds you bot are being called and the current PFD rate is to high.

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To: deeno who wrote (107275)3/30/2012 12:35:45 PM
From: Elroy
of 118206
 
It would seem AGNC should issue all the preferreds that it can at 8%, And pay dividends on he common at about 16%, forever and ever. So.....will they never do another secondary? Gotta admit, I'm confused. If they can raise preferred capital at 8%, why did hey do a secondary one month ago, when the new secondary shares pay the normal 16% yield? Of course preferred capital at 8% makes more sense than common shares which pay about 16%, so why ever do a common secondary ever again?

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To: Elroy who wrote (107276)3/30/2012 12:44:26 PM
From: deeno
of 118206
 
the PFD is an obligation to pay. shareholders "go with the flow". When the leverage works against you those PFD's need to go pronto. Dont know if capital structure would play as well, but wouldnt be surprised. Finally you need interest in your securities. perhaps selling more shares is pissing off your current shareholders, but spreads are still there so you want more money. I question what the security is for the PFD players, especally when these things implode, so that to might limit how much of this stuff they can float. For the time being full steam ahead..............

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From: gizwick3/30/2012 1:42:09 PM
of 118206
 
Just bought shares in PDS as a two year value play. 2013 earnings are estimated at $1.60. Company is reinventing itself as more focused as a oil service company as opposed to ng. 50% gain very possible IMHO.

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To: Dale Baker who wrote (107263)3/30/2012 2:22:15 PM
From: KaiserSosze
of 118206
 
Natural gas at $2.15...wow. I think we know what's weighing on MHR right now.

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