Anworth Shares Soar After Rate Cut

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Shares in Anworth Mortgage Asset Corp. soared 13 percent Tuesday after the Federal Reserve Board of Governors cut interest rates by a half point. Also, the lender earlier said it will take an estimated $143 million impairment charge.


The Santa Monica-based mortgage company said in a filing it made Friday with the Securities and Exchange Commission that its Belvedere Trust Secured Assets Corp. is unlikely to find financing to pay its loans. As a result, the impairment charge will include its $100 million initial investment in Belvedere and $42.8 million in intercompany loans to Belvedere.


Anworth said in early September that Belvedere Trust received default notices from some lenders when the collateral securing some of its loans lost its value. Anworth determined it was unlikely to find alternative financing to pay the loans and would take an impairment charge equal to all of Belvedere’s assets.


Anworth said it does not expect the impairment charge will result in future cash expenditures.


Shares in Anworth closed up 13 percent, or 65 cents, to $5.70 in trading Tuesday on the New York Stock Exchange. Shares have dropped 43 percent since the end of July.

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