Published on October 12, 2010
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MFA
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FINANCIAL,
INC.
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350
Park Avenue
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New
York, New York 10022
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PRESS
RELEASE
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FOR
IMMEDIATE RELEASE
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October
12, 2010
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NEW
YORK METRO
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CONTACT:
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MFA
Investor Relations
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NYSE:
MFA
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800-892-7547
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www.mfa-reit.com
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MFA
Financial, Inc. Finances $246.3 Million of its
Non-Agency
RMBS
MFA
Financial, Inc. (NYSE:MFA) announced today that as part of a re-securitization
transaction on October 8, 2010 it sold an aggregate of $985.2 million in
principal value of Non-Agency residential mortgage-backed securities (“RMBS”) to
Deutsche Bank Securities, Inc. In connection with this transaction,
third-party investors purchased $246.3 million of face amount of variable rate,
sequential senior bonds (the “Senior Bonds”) rated “AAA” by Standard &
Poor’s (“S&P”), issued by Deutsche Mortgage Securities, Inc. Remic Trust,
Series 2010-RS2 (the “Trust”). The Senior Bonds have a weighted
average life of 1.3 years and a pass-through rate of one-month LIBOR + 125 basis
points. Since MFA will consolidate the Trust, MFA views this
structured transaction as effectively financing the underlying RMBS at an
attractive rate.
In
connection with this transaction, MFA acquired $375.2 million of face amount of
six classes of mezzanine fixed-rate bonds with S&P ratings ranging from AAA
to B and $363.7 million of face amount of non-rated subordinate bonds issued by
the Trust, which together provide credit support to the Senior
Bonds. MFA expects to finance these bonds using repurchase agreements
and has the flexibility to sell some or all of these bonds in the
future. No gain or loss will be recorded in connection with the
re-securitization transaction for financial reporting purposes as MFA is
required under GAAP to consolidate the Trust.
MFA is a
real estate investment trust primarily engaged in the business of investment, on
a leveraged basis, in Agency and Non-Agency residential mortgage-backed
securities.
This
press release does not constitute an offer to sell or a solicitation of an offer
to buy the securities issued by the Trust in any jurisdiction in which such an
offer or sale would be unlawful.
When used in this press release or
other written or oral communications, statements which are not historical in
nature, including those containing words such as “view,” “believe,” “expect,”
“anticipate,” “estimate,” “plan,” “continue,” “intend,” “should,” “may” or
similar expressions, are intended to identify “forward-looking statements”
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, and, as such,
may involve known and unknown risks, uncertainties and assumptions. Statements
regarding the following subjects, among others, may be forward-looking: changes
in interest rates and the market value of MFA’s MBS; changes in the prepayment
rates on the mortgage loans securing MFA’s MBS; MFA’s ability to borrow to
finance its assets; implementation of or changes in government regulations or
programs affecting MFA’s business; MFA’s ability to maintain its qualification
as a REIT for federal income tax purposes; MFA’s ability to maintain its
exemption from registration under the Investment Company Act of 1940; and risks
associated with investing in real estate assets, including changes in business
conditions and the general economy. These and other risks, uncertainties
and factors, including those described in the annual, quarterly and current
reports that MFA files with the SEC, could cause MFA’s actual results to differ
materially from those projected in any forward-looking statements it makes. All
forward-looking statements speak only as of the date on which they are made. New
risks and uncertainties arise over time and it is not possible to predict those
events or how they may affect MFA. Except as required by law, MFA is not
obligated to, and does not intend to, update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise.