IndyMac Bancorp (IMB) Deferral Impact on Alesco Financial Inc.
12 Mayo 2008 - 12:45PM
PR Newswire (US)
PHILADELPHIA, May 12 /PRNewswire-FirstCall/ -- Alesco Financial
Inc. (NYSE:AFN), a specialty finance real estate investment trust,
announced today that IndyMac Bancorp (NYSE:IMB) disclosed this
morning that it will defer making the interest payments on IMB's
trust preferred securities, including those in AFN's portfolio. AFN
holds a portion of the equity interests in eight collateralized
debt obligation, or "CDO," transactions which include trust
preferred securities issued by IMB. As previously disclosed, IMB's
securities represent an aggregate of 2.43% of the total pool of
collateral in those eight CDOs. This collateral represents
approximately $2.1 million in aggregate interest payments per
quarter to the eight CDOs, of which AFN's proportionate share is
approximately $1.5 million or about $0.02 per diluted AFN common
share per quarter. AFN is in the process of reviewing the impact of
the IMB deferral on its portfolio. AFN currently expects that IMB's
deferral will trigger the over-collateralization tests in five of
the eight CDOs for a period of time. Once an over-collateralization
test is triggered in a CDO, AFN will no longer receive current
distributions of cash in respect of its equity interests in the CDO
until sufficient cash flow is paid to senior debt holders in the
CDOs to cure the over-collateralization tests. IMB did not disclose
how long it expects to defer its payments. AFN currently expects
that, even if IMB does not resume making payment, and assuming no
additional deferrals, the five affected CDOs will recommence making
equity distributions within three to eight quarters. For the year
ended December 31, 2007, and the quarter ended March 31, 2008, the
five CDOs which AFN expects to trigger over-collateralization tests
contributed $30.1 million, or 36%, and $8.2 million, or 41%,
respectively, of AFN's adjusted earnings for such periods. AFN's
adjusted earnings will continue to include this income even though
AFN will not receive corresponding cash distributions until the
over-collateralization tests have been cured. At April 30, 2008,
AFN had available unrestricted cash of $120 million, including cash
generated by previously-disclosed gains on credit default swaps.
This cash would be sufficient to allow AFN to maintain its first
quarter 2008 dividend rate for the remainder of 2008, even after
giving effect to the trigger of the over-collateralization tests
described above. The payment of future dividends is, however,
subject to the review and approval of AFN's board of directors, and
there can be no assurance that AFN's board will determine to
maintain the first quarter dividend rate. As discussed on AFN's
earnings call last week, AFN is reviewing a number of strategies
for the company, including whether to continue to maintain its REIT
qualification. Any change in strategy could impact the level of
future dividend payments. About Alesco Financial Inc. Alesco
Financial Inc. is a specialty finance REIT headquartered in
Philadelphia, Pennsylvania and trades on the New York Stock
Exchange under the symbol "AFN". Alesco is externally managed by
Cohen & Company Management, LLC, a subsidiary of Cohen and
Company, a global alternative fixed-income asset manager. For more
information, please visit http://www.alescofinancial.com/ .
Investors: Media: John Longino Joseph Kuo Chief Financial Officer
Kekst and Company 215-701-8952 212-521-4863 DATASOURCE: Alesco
Financial Inc. CONTACT: Investors, John Longino, Chief Financial
Officer of Alesco Financial Inc., +1-215-701-8952, ; Media, Joseph
Kuo of Kekst and Company, +1-212-521-4863 Web site:
http://www.alescofinancial.com/
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