MFA Announces $1B MBS Sale

MFA Mortgage Investments Inc., New York, has announced the sale of approximately $1 billion of mortgage-backed securities in connection with a change in its leverage strategy. The securities, consisting of approximately $950 million of agency MBS and $50 million of triple-A rated nonagency MBS, were sold at a realized loss of about $15 million, MFA said. The company said it has also terminated repurchase agreements at no cost and approximately $525 million of associated interest rate swap agreements at a cash cost of about $31 million. MFA said the strategy, to reduce its target debt-to-equity leverage to 7-9 times, stems from its view that "credit conditions are tightening, rapidly and indiscriminately." Despite the fact that other leveraged companies investing in high-quality MBS that have faced credit problems used "substantially higher" leverage than MFA, "our interpretation of their public disclosure and other information available to us increases the probability of increased margin requirements in the future for all repurchase agreement borrowers, including MFA," the company said. MFA can be found online at http://www.mfa-reit.com.