In Case You Missed It. Two Harbors Reinstates Dividend

A couple of weeks after suspending all dividends (common and preferreds) mREIT Two Harbors Investment (TWO) announced reinstatement of their dividends.

On 3/24 the company announced the suspension.

On 3/25 they announced the sale of their non-agency residential mortgage portfolio to reduce risk and potential margin calls.

Last Friday they had an update and made no mention of the reinstatement.

With todays announcement the company is stating $1.2 billion in unrestricted cash–guess the folks are pretty damned smart.

Disclosure–I owned a modest position in TWO-D 7.75% perpetual which I bought last week and sold on the early pop of $3-4/share this morning. I expect to repurchase at lower levels.

7 thoughts on “In Case You Missed It. Two Harbors Reinstates Dividend”

  1. My thinking on mREITs – if margin calls (or their threat) forced asset liquidations at depressed prices, then whatever BV was actually lost through sales (as opposed to MtM valuations) is gone forever. This reduces their earning power going forward of course. It’s the same mechanism that I see over time with CEFs – a long term erosion of value in the common equity.

    If mREIT preferred and ETD trades based on an assumed cushion of common equity, then the prices are potentially impacted permanently. While maybe the current levels are too low, it’s possible they never trade at par again unless called.

    1. That’s true, they could announce tomorrow that they’re re-suspending the dividend.

  2. Will be interesting to see if they repurchased a bunch of preferred after telling the market that they were suspending dividends?? Especially when not making a big deal of reinstatement.

  3. “Although the potential aggregate size of the servicing advance obligations is not known, at this time we believe that we will be well positioned from a liquidity standpoint to continue to make servicing advances in the future.”
    If MSR servers get no relief, it could make their 1.2 billion evaporate.
    Think, I’ll wait.

Leave a Reply

Your email address will not be published.