Troubled REIT Looks to Improve Liquidity

In an effort to improve liquidity, Impac Mortgage Holdings Inc., a real estate investment trust headquartered in Irvine, Calif., is making an offer to the holders of its Series B and Series C preferred stock to exchange those shares for common stock in the company. If approved and completed, the swap would end Impac's obligation to pay or accrue quarterly dividends on the preferred stock, allowing it to use or preserve the cash for other purposes. Joseph Tomkinson, chairman and chief executive, said, "The possible exchange offer to swap preferred for common stock could have a very positive effect on the liquidity of the company. If successful, not only will it reduce our fixed-dividend expense, it will also strengthen the company's capital structure. Ultimately a successful exchange offering will help management in its attempt to rebuild shareholder value." For 2007, Impac recorded a loss of $2 billion.