Zacks Equity Research, Chicago, has initiated coverage of Thornburg Mortgage with a Hold rating.Zacks said Thornburg had a "mediocre" quarter, citing "intense competition and a still-flat yield curve" that have suppressed margins. Conditions will "continue to worsen" over the next six months, and Thornburg "will have difficulty covering the dividend" next year, Zacks predicted. "On the other hand, originations in the third quarter were robust, and the company is on target to exceed last year's origination volume by 10%," the research firm said. "In addition, the company's [adjustable-rate mortgage] portfolio has an excellent credit profile, where default risk is minimal." Zacks can be found online at http://www.zacks.com.

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