Luminent to Reposition Spread Portfolio

Luminent Mortgage Capital, San Francisco, has announced that it intends to reposition its spread portfolio assets to improve profitability and dividend-paying capacity and that it has discontinued the use of hedge accounting.The repositioning will involve the sale of some mortgage-backed securities and will entail the recording of a noncash impairment charge of approximately $112 million in the fourth quarter, the company said. Luminent said it believes the move will accelerate its diversification into high-yielding residential mortgage credit investments and enable it to achieve higher returns on equity. As a result of the discontinuation of hedge accounting, as defined in Statement of Financial Accounting Standards No. 133, all changes in the value of Luminent's portfolio of hedges will be reflected in the company's consolidated statement of operations under generally accepted accounting principles, Luminent said. The company can be found online at http://www.luminentcapital.com.