Posts for Ticker ‘CIM’

Chimera & Annaly Dividend Hike, Profits In Mortgages (CIM, NLY)

Money Stack PicInvesting in mortgages might not be as bad as many thought.  Chimera Investment Corporation (NYSE: CIM) has already raised more capital on more than one occasion since coming public in 2007 when the mortgage arena was in the process of going from weak to bottomless.  We were intrigued by its vulture investing intentions as it bought up distressed mortgages, particularly as it was tied to the very successful Annaly Capital Management, Inc. (NYSE: NLY).  Despite the notion that Chimera became a vulture too soon and well before any bottom could be found in sight, Chimera must be doing pretty well again.  Ditto on Annaly.  This mortgage REIT status requires each to pay out 90% of its income and Chimera just hiked its dividend to $0.12 for the Q3-2009 period.  Annaly also just hiked its dividend payout today to $0.69, which might actually be its highest payout ever.
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Posted on: September 21, 2009 – 5:03 pm in Bonds, Dividend, Financial Stocks, Housing, REIT, ,

Chimera Files To Raise More Cash, Again (CIM, NLY)

Money_stack_pic_3Chimera Investment Corporation (NYSE: CIM) is back at the trough to raise more cash.  The vulture mortgage investment REIT has filed to sell up to $750 million in common and preferred stock.  No underwriters were named in the filing.

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Posted on: December 24, 2008 – 10:53 am in Bonds, Financial Stocks, REIT, Secondary Offering, ,

Top Pre-Market Analyst Upgrades & Downgrades (CIM, CCE, KMB, KSS, WFC, AMAT, FTI, SSYS)

It is looking pretty light so far from analyst coverage this Monday morning.  Here are some of the top individual stock calls we have seen this morning from Wall Street analysts:

  • Chimera Investment (NYSE: CIM) Raised to Outperform at KBW.
  • Coca-Cola Enterprises (NYSE: CCE) Raised to Overweight at JPMorgan.
  • Kimberly-Clark (NYSE: KMB) Started as Buy at Citigroup.
  • Kohl’s (NYSE: KSS) Raised to Market Weight at Thomas Weisel.
  • Wells Fargo (NYSE: WFC) Raised to Outperform at Credit Suisse.
  • Applied Materials (NASDAQ: AMAT) Cut to Perform at Oppenheimer.
  • FMC Technologies (NYSE: FTI) Cut to Underweight at JPMorgan.
  • Stratasys (NASDAQ: SSYS) Cut to Market Perform at William Blair.

Here was a sector downgrade this morning from Deutsche Bank on the solar stocks.

Jon C. Ogg
November 10, 2008

Posted on: November 10, 2008 – 8:18 am in Analyst Calls, , , , , , , ,

Chimera & Annaly, Venturing Further With Vulture Capital (CIM, NLY)

Chimera_logo_2Chimera Investment Corporation (NYSE: CIM) has raised cash via a secondary offering.  The mortgage and fixed income investment vehicle, which we have referred to as the first public vulture fund set up to capitalize off of the current mortgage malaise, priced a secondary offering of 110,000,000 shares of common stock at a price of $2.25 per share. 

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Posted on: October 24, 2008 – 12:23 pm in Financial Stocks, REIT, Secondary Offering, ,

5 Leveraged Financial Winners In Fannie/Freddie Seizure (LEH, AIG, NLY, CIM, WM)

This morning we are seeing a massive gain on the heels of the US government seizure tied to Fannie Mae and Freddie Mac.  Those shares are halted and Warren Buffett has just called these virtual call options.  What we wanted to see was which actively traded financial stocks are really going to benefit the most from the US stepping up to the plate and guaranteeing the GSE debts and obligations. While the answer to "Who Wins?" is really EVERYONE (except FNM/FRE common holders), there are several stocks that will be key to watch as this could be yet another game saver for them as they are still somewhat leaders and most leveraged compared to their top peers.

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Posted on: September 8, 2008 – 7:35 am in Banking, Brokerage Firms, Financial Stocks, , , , ,

Chimera Going For More Capital (CIM, NLY)

Chimera Investment Corporation (NYSE: CIM) has filed with the SEC to raise up to $345,000,000 in new capital via the sale of common stock.  Concurrent with this offering, the company will sell shares of common stock to Annaly Capital Management, Inc. (NYSE: NLY) in a private offering at the same price per share as the price per share of this public offering.  It does note the limitations of a 9.8% stake maximum percentage ownership under the REIT qualifications.  This was the entity that we referred to as "Annaly’s vulture entity" when it was coming public.

Chimera is listing Credit Suisse and Merrill Lynch as the lead underwriters.  Others in the syndicate are listed as Deutsche Bank, JPMorgan, Citi, and UBS.

It plans to use the net proceeds of this offering to finance the acquisition of additional prime and Alt-A mortgage loans, non-Agency RMBS, Agency RMBS and ABS, CDOs, CMBS and other consumer or non-consumer ABS. It may also use the proceeds for other general corporate purposes such as repayment of outstanding indebtedness, working capital, and for liquidity needs.

As Chimera has only been public for about 6 or 7 months and as the stock has been hit hard over its assets it previously purchased, the reaction is not a solid one today.  Shares are down 5.6% at $12.20 after 30 minutes of trading, and its post-IPO trading range is $10.59 to $19.79.

You can join our open email distribution list to hear about other secondary offerings, mergers, special financings, IPO’s, restructurings, and other special situations.

Jon C. Ogg
June 4, 2008

Posted on: June 4, 2008 – 9:06 am in Financial Stocks, REIT, Secondary Offering, ,

ValueAct Going After Chimera? (CIM, NLY)

ValueAct Capital Management is a leading activist fund that acquires shares in public companies to influence their boards to make certain actions or to fix current problems.  In an SEC Filing, the fund (through multiple entities) has just disclosed that now holds over 2.51 million shares, or some 6.7% of Chimera Investment Corp. (NYSE: CIM).  As of December 31, 2007, ValueAct had a 1 million share stake for some 2.65% of the shares outstanding.

For those of you who don’t know Chimera, this is the one we praised for being the first mortgage vulture to file seperately to come public last year.  That worked incredibly well, for a while.  Then the woes started spreading there as no one was immune.  The fact that Annaly Capital Management, Inc. (NYSE: NLY) was sponsor and much of the team was the same only gave it more credibility.

But Chimera, after almost seeing $20.00 has slid to a low of $10.59 and shares closed at $12.24 today.  It has been punished.

In the filing, it notes, "…changes in the Issuer’s operations, business strategy or prospects, or from sale or merger of the Issuer.  To evaluate such alternatives, the Reporting Persons will routinely monitor the Issuer’s operations, prospects, business development, management, competitive and strategic matters, capital structure, and prevailing market conditions, as well as alternative investment opportunities, liquidity requirements of the Reporting Persons and other investment considerations. "

These purchases were made from March 11 to April 23 at prices of $11.76 to $12.99.  Chimera closed up 3.6% at $12.24 today and shares have not reacted in after-hours trading.

You can join our open email distribution list to hear about other activist investor activities, restructurings, spin-offs, IPO’s, special financings, and more special situation previews.

Jon C. Ogg
April 24, 2008

Posted on: April 24, 2008 – 3:47 pm in Activist Investor, Financial Stocks, ,

Is Annaly Really Immune? (NLY, TMA, CIM)

Shares of Annaly Capital Management, Inc. (NYSE: NLY) are being pounded this morning.  The reason for the selling isn’t on its own news.  Competitor Thornburg Mortgage (NYSE: TMA) has fallen some 60% on massive share volume after it disclosed new margin calls that have gone unmet, higher default rates, using default rights of its own, a Fitch downgrade, multiple analyst downgrades, and even the question of bankruptcy.

Annaly even raised $900 million recently.  Annaly has long been thought of as immune because of its high quality mortgages, yet the real estate in the movie Wall Street might have been right by saying "Even the rich are bitching!" Annaly has see n a 19% drop to $15.61 in trading after the first hour of the market open and it has now fallen more than 25% from recent highs seen just over the last two weeks.

Annaly is also involved in ownership and running Chimera Investment (NYSE: CIM), which we have applauded last year as the first pure vulture fund filed to come public.  That was working better than well for a while, but this is now trading as a busted post-IPO company and it has put in new post-IPO lows this morning.  On last look shares were down almost 10% at $14.51, above the $13.99 lows seen this morning.  We had noticed the sharp price correction in this one earlier this week and last with no real news.

We still think many financial mergers are going to almost end up being mandated.  But at this point, the fallout in the mortgage and credit malaise is leaving no one immune.  The beatings continue.

Jon C. Ogg
March 6, 2008

Posted on: March 6, 2008 – 10:50 am in Financial Stocks, , ,

Top 10 Pre-Market Analyst Calls (A, BBBY, BBY, DTV, ECL, EP, IBM, NTAP, LRCX, MOT, CRM)

These are not all of the calls affecting stocks, but these are the top analyst calls that 247WallSt.com is looking at this Thursday morning:

  • Blockbuster (NYSE: BBI) raised to Overweight at JPMorgan.
  • Borg Warner (NYSE: BWA) cut to Neutral at JPMorgan.
  • Boyd Gaming (NYSE: BYD) cut to Underweight at KeyBanc.
  • CDC Corp. (NASDAAQ: CHINA) started as Buy at Cantor Fitzgerald.
  • Chimera (NYSE: CIM) started as Neutral at JPMorgan.
  • Lear (NYSE: LEA) cut to Neutral at JPMorgan.
  • RF Micro Devices (NASDAQ: RFMD) downgraded to Hold at Jefferies.
  • Sotheby’s (NYSE: BID) raised to Outperform at JMP Securities.
  • Western Digital (NYSE: WDC) and Seagate (NYSE: STX) were both cut to Hold from Buy at Citigroup.
  • Varian (NASDAQ: VARI) raised to Buy at UBS.

Jon C. Ogg
February 28, 2008

Posted on: February 28, 2008 – 8:08 am in Analyst Calls, , , , , , , , , ,

MFA Mortgage Ready To Go Vulture Investing In Mortgages (MFA, MFR, NLY, CIM, BX)

MFResidential Investments, Inc. submitted an IPO filing on Tuesday.  The total proposed maximum aggregate amount in securities is listed as $250,000,000 in securities, although this number is merely for filing purposes.  The underwriting group is listed as UBS, Bear, Stearns, Deutsche Bank, and Morgan Stanley. They have applied for the trading symbol “MFR” on the New York Stock Exchange.

MFResidential Investments will target residential mortgage-backed securities (MBS) and residential mortgage loans, as well as other real estate-related financial assets on a leveraged basis.  MFA Mortgage Investments, Inc. (NYSE: MFA) owns MFA Manager, LLC, who will externally manage MFResidential Investments. The company will seek to provide appealing risk-adjusted returns to its shareholders by investing in a diverse spectrum of real-estate financial assets. These assets will be financed through repurchase agreements, warehouse facilities and other forms of borrowing. MFResidential and its manager, MFA, believe that the current housing market situation has provided opportunities to take advantage of low interest rates and credit spreads. MFA engages in similar investing and financing activities for real-estate financial assets.

This isn’t at all the first of the mortgage vulture investing in this sector.  We have been pounding the table on  the Annaly Capital Management (NYSE: NLY) spin-off Chimera Corp. (NYSE: CIM) even before they came public as having the right expertise and model for pulling this off.  The Blackstone Group (NYSE: BX) has also made its vulture ventures known.  Octavian recently went vulture too, although this was on an international scope.  Even hedge fund Marathon announced plans to go vulture investing with TCW Group.

MFA Mortgage has a $1.12 Billion market cap and its shares are unchanged today at $10.70; its 52-week trading range is $5.55 to $11.07.

Rachel Lopez
February 13, 2008

Posted on: February 13, 2008 – 3:08 pm in Financial Stocks, IPOs, Value Investing, , , , ,

Another Billion Fund Goes Further Into Distressed Investing

Octavian Advisors, LP, a global alternative investment management firm managing over $1 Billon in assets, has hired Arif Gangat as Managing Director and Oscar Mockridge as Director to focus on international distressed debt investments.  This will be for investing in distressed debt outside of the United States, so it won’t be another distressed debt vulture buying up distressed paper inside the U.S.

CEO Richard Hurowitz believes that Octavian’s unique investing techniques amid the current turmoil in world-wide markets provide a unique opportunity on which these hires can capitalize with their expertise and experience.

  • Previously, Mr. Gangat directed distressed debt and special situation equity investments at Southpaw Asset Management.
  • Mr. Mockridge is a former Senior Vice President of the distressed debt and special situations division at Halcyon Asset Management and a former Senior Vice President for the financial restructuring group at Houlihan Lokey Howard & Zukin.

We are seeing more and more interest in funds going out now acting as opportunistic vulture investors.   We noted how Annaly and Chimera have a vulture and value approach for investors.

If you read through enough business history and have the power of a few billion dollars here and there, you’ll understand why. In fact, if you have the luxury of taking a very long-term outlook and don’t even watch the market on a short-term basis, you might wonder if short term trends even matter.  Take a look at our "anniversary of the crash" article.  Times are changing and markets have matured greatly since then, but you can look at the lessons of looking at distressed large companies. 

Rachel Lopez
February 6, 2008

Posted on: February 6, 2008 – 12:50 pm in Financial Stocks, Value Investing, , , , , ,

What Mortgage Mess? Annaly Raises Over $900 Million In Secondary (NLY, CIM)

Annaly Capital Management, Inc. (NYSE: NLY) has set the price for its public offering of 51,000,000 shares of common stock at $19.25 per share.  All of the shares are being offered by Annaly rather than by shareholders and it intends to use the proceeds to purchase mortgage-backed securities and for general corporate purposes.

It has a rather large underwriting group.  Merrill Lynch and Morgan Stanley are the joint book-running managers; and UBS, Wachovia, Credit Suisse, Keefe Bruyette & Woods, and then RBC Capital Markets are listed as co-managers.  Underwriters have a 30-day option to purchase up to an additional 7,650,000 shares of common stock to cover over-allotments.

This secondary will generate estimated gross proceeds of approximately $981.8 million before fees, and the estimated net proceeds to the Company from this offering after expenses are expected to be approximately $939.8 million, which the Company  The Company expects to close the transaction on or about January 29, 2008, subject to the satisfaction of customary closing conditions.

  • Annaly has been almost entirely an immune business model during this entire mortgage, CDO, CLO, and now the counterparty risk meltdown that has been present since late summer.  As the management team at Annaly has been bulletproof we have been favorable on its recently launched investment vehicle called Chimera Investment (NYSE: CIM).  We have been in praise of this from the filing date of the IPO and referred to it as the safer vulture investing vehicle that the public can use to profit off of the malaise that has been present, is present now, and that will be present in the coming months (hopefully just months).  Even Jim Cramer came out touting this one fairly recently.

Annaly’s market cap as of the close was $7.9 Billion, and its 52-week trading range is $12.14 to $20.22.  This secondary out of Annaly will probably be getting plenty of attention from the media on Thursday and Friday as the company isn’t having to pander to or cater to any stringent demands as others have in the current state of the financial sector.

Jon C. Ogg
January 23, 2008

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Posted on: January 23, 2008 – 10:19 pm in Financial Stocks, REIT, Secondary Offering, ,

Vulture & Value Investing With Chimera Investment (CIM, NLY, LM)

Chimera Investment (NYSE: CIM) is an investment vehicle that is set up to invest in mortgages per its charter, although as we noted the day of the initial filing that this is going to effectively be nothing short of a vulture fund.  We have not been able to get data out of the company as of yet to see how much of the roughly $500 million raised in the IPO (before fees) has been placed in distressed assets to date, and frankly we’re pretty sure that Chimera doesn’t want that data out there.

This morning on CNBC, Dennis Gartman of the famed Gartman Letter noted besides covering short sales in many of his financial names that as far as being long any financial stocks he would look at Chimera and he noted the Annaly ties.  We’ve noted how Jim Cramer already got on board with this one last month. 

Also just this week (on Tuesday) Deutsche Bank initiated coverage on Chimera with a BUY rating.  Keefe Bruyette Woods started this with a peer perform rating last month and they are a premiere financial sector-focused brokerage and research house.

24/7 Wall St. has been positive on the notion of this investment vehicle even since before the IPO as this is essentially run as a distressed mortgage asset buyer by the people at Annaly Mortgage (NYSE: NLY), and Annaly is roughly 10% owner of Chimera.  It is our stance that the heads of Annaly know what they are doing in this sector and will be able to find value while everyone is in panic and crisis mode.

Remember that when you want to bet like a vulture investor you often do better betting on the best vulture than betting on the carcass.  So in Chimera, there are opportunities for value investors and speculators alike.  This has traded in a range of $14.50 to $18.83 since coming public at $15.00 in November and it closed at $17.93 yesterday. 

It also appears that Legg Mason (NYSE: LM) via its Legg Mason Opportunity Trust took an 8.93% stake in the company in a December filing.  Copper River Partners showed that they owned a 5.2% stake at the end of November.

Jon C. Ogg
January 17, 2008

Posted on: January 17, 2008 – 8:17 am in Financial Stocks, Value Investing, , ,

Blackstone Goes Vulture in Mortgages & Loans (BX, NLY, CIM)

The Blackstone Group (NYSE:BX) this morning announced that it has closed upon the Blackstone Credit Liquidity Partners L.P. and has secured capital commitments of more than $1.3 Billion.

If you look at the news headlines about banks, mortgages, lenders, consumer credit and more, the you will realize this is a vulture fund ready to make money off of the disconnect and illiquidity that is currently present in the debt markets. In addition to this new Credit Liquidity fund, Blackstone manages 11CDOs and two private investment partnerships in its corporate debtgroup and all have aggregate capital commitments of over $11 Billion.  Here is the description for the new fund:

  • The fund was created to capitalize on the recent dislocations in the credit markets by investing in a broad range of debt and debt-related securities and instruments including bank debt, publicly traded debt securities, bridge financings, securities issued by CDOs, and other debt instruments, all on a global basis.

It takes guts to do this in today’s markets.  Right now the economy is still talking about "percentage chance of a recession" and we’ll know how this whole mess turns out in 2008 and 2009.  There are obviously going to be more problems coming in the mortgage and consumer lending markets because these are never "one and done" events.  But in time we’ll also probably see that the financial markets didn’t just throw out the baby with the bathwater.  They may have thrown mommy and all of baby’s cousins too.

Before you think this is crazy, Blackstone had announced plans to launch this before.  Blackstone, despite all of its criticism earlier in the year does at least have a history of living up to its commitments more than other private equity shops who have walked away from so many deals of late.

There is another vulture REIT that was launched as an IPO last month by the name of Chimera Investment (NYSE:CIM).  Chimera is backed by Annaly Capital Management (NYSE:NLY), and they are one of the few spots that is actually immune to today’s mortgage malaise.  If Blackstone and Annaly can find some value out there by stepping down a rung or two, maybe the market can too.

many firms try to avoid the term "vulture fund" because of the negative perception.  But regardless of what issuers call these, the vultures are circling.  And that’s a good thing.   

Jon C. Ogg
December 13, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: December 13, 2007 – 10:09 am in Private Equity, , ,

IPO Filing: Chimera, A Vulture Fund With Annaly (CIM, NLY)

Annaly Capital Management, Inc. (NYSE:NLY) announced the filing for an IPO of Chimera Investment Corporation under the NYSE tick "CIM."  Chimera is a newly-formed specialty finance company that will invest in residential mortgage loans, residential mortgage-backed securities, real estate-related securities and various other asset classes.  Does this sound like a vulture fund to you?  It should.  For filing purposes it lists up to $250 million in common stock that it will sell, although that number could easily change.

Chimera will be externally managed by Fixed Income Discount Advisory Company, or FIDAC, a wholly-owned subsidiary of Annaly, a New York Stock Exchange-listed real estate investment trust. Concurrent with this offering, Annaly will acquire 9.8% of Chimera’s outstanding shares of common stock after giving effect to the shares issued in the offering. Chimera intends to elect and qualify to be taxed as a REIT for federal income tax purposes.

Merrill Lynch & Co. will act as the sole lead manager and book-runner for the proposed offering.  Since this is a new company, there are no real financials and there is no real operating history.  It says it will focus on higher quality residential mortrgage loans, but it lists that it can look right down into asset-backed securities, commercial mortgage backed securities, and CDO’s.  This was filed ahead of the discount rate cut today, but this looks to be the first new public distressed fund filing out there.   

They arent calling it a vulture fund, but it is.  Chimera in mythology is a creature made up of multiple creatures.  And it’s a mean one.

Jon C. Ogg
August 17, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he is the publisher of the 24/7 Wall St. Special Situation Investing Newsletter and does not own securities in the companies he covers.

Posted on: August 17, 2007 – 8:56 am in Financial Stocks, IPOs, , , , , , , ,