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The recent wave of consolidation among mortgage REITs has caught the attention of several executives in the sector. But it remains to be seen whether the deal-making reflected unique sets of circumstances or a sign of things to come among REITs and other mortgage-focused entities.
It has been just more than three weeks since Annaly Capital Management Inc. announced an agreement to acquire Hatteras Financial Corp. in a deal not only notable for its $1.50 billion valuation but also for the fact that it was the second deal unveiled in three business days that involved two mortgage REITs unaffiliated in the form of sponsorship or management. Sutherland Asset Management Corp. had unveiled its agreement for a reverse merger with ZAIS Financial Corp on April 7.
The two previously announced deals in the space to date in 2016 -- Apollo Commercial Real Estate Finance Inc.'s February agreement to purchase Apollo Residential Mortgage Inc. and ARMOUR Residential REIT Inc.'s March tender offer for JAVELIN Mortgage Investment Corp. -- involved sets of companies with external managers under the common control of Apollo Global Management LLC and ARMOUR Capital Management LP, respectively.
"I do think you will see more consolidation," New Residential Investment Corp. President and CEO Michael Nierenberg said during a May 4 conference call, according to a transcript of his remarks. He noted that two of the deals had involved consolidation of entities with common sponsors.
The REIT, which is managed by...