7 thoughts on “mREIT Ellington Financial to Sell Fixed to Floating Preferred”

  1. I spent 30 minutes today looking at the company. Not deep dive but I did get wet.

    Aside from being externally managed (I don’t like external management but that’s the business model), I find no deal killers. I don’t see either dishonesty or incompetence in the management.

    It’s an m-REIT, with m-REIT risk. No S&P ratings. Pricing is about the same as NLY, which is my standard for m-REITS. Except as a diversifier I see nothing compelling here. But issuers often leave a bit of meat on the bone on first issues, so maybe a good flip opportunity.

    What have we been reduced to?

  2. The Ellington Financial Fixed to Float Preferred A just priced at 6.75% and the Grey Sheet symbol is EGLLP and NYSE EFC Preferred A.
    What would you like the power to do, Nomad

    1. And the company no longer issues a K-1:

      Prior to January 1, 2019, EFC was taxed as a partnership and was required to provide shareholders with a Schedule K-1, which separately reports the shareholders’ items of income, gain, loss, deduction and credits.

      Effective January 1, 2019, EFC elected to be taxed as a corporation for both U.S. federal and state income tax purposes, and intends to elect to be treated as a real estate investment trust (“REIT”) for the year ending December 31, 2019.

      Shareholders will receive a final Schedule K-1 for the period from January 1, 2018 through December 31, 2018. The final Schedule K-1 should be reported on shareholders’ 2018 tax return.

    2. Interesting that the adjustment premium over 30 day LIBOR = +5.196% vs today’s LIBOR of about 2.00, that gives you a little cushion to downside interest rates before it would adjust downward from this pricing……. Oh and another really BIG plus is that they got a rating at Egan-Jones! Oh boy, BBB+ from Egan-Jones-Morwa…. oops, I mean Egan-Jones…

      1. BTW, the LIBOR + compares favorably to NLY-I’s LIBOR + 4.989% which is trading at 25.73. However, I also see where Ellington’s involved with CLOs but I don’t yet know how much they’re involved on a relative size basis… Morgan Stanley lead manager gives them a reasonable pedigree…

        1. 8% of their portfolio is CLO…About 74% is residential and commercial mortgages. 18% is consumer loans….

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