Ellington Financial Announces Estimated Book Value Per Common Share and Provides Business Updates Due to COVID-19
–Declares Dividend of
–Has Strategically Lowered Leverage and Enhanced Liquidity–
Book Value Per Common Share: As of
March 31, 2020, estimated book value per common share1 was $15.08.
Common and Preferred Dividends: On
April 7, 2020, the Company's Board of Directors (the "Board") declared a common stock dividend of $0.08per share, payable on May 26, 2020to stockholders of record as of April 30, 2020, and a dividend of $0.421875per share on the Company's 6.750% Series A Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock, payable on April 30, 2020to preferred stockholders of record as of April 17, 2020. The Company paid its March monthly dividend of $0.15per common share in cash, on March 25, 2020as originally declared.
Liquidity: As of
March 31, 2020, the Company had unrestricted cash of approximately $130 million.
Unencumbered Assets: As of
March 31, 2020, in addition to its unrestricted cash, the Company had other unencumbered assets of an estimated $286 million.
Leverage and Financing: As of
March 31, 2020, the Company's total debt-to-equity ratio and recourse2 debt-to-equity ratio had declined to an estimated 3.5:1 and 2.5:1 from 3.8:1 and 2.6:1, respectively, as of December 31, 2019. Adjusted for borrowings associated with unsettled purchases and sales, the Company's total debt-to-equity ratio and recourse debt-to-equity ratio were an estimated 3.1:1 and 2.1:1 as of March 31, 2020, as compared to 3.8:1 and 2.6:1, respectively, as of December 31, 2019. As of March 31, 2020, nearly half of the Company's recourse borrowings were secured by agency pools. The Company has satisfied all of its margin calls under its financing arrangements.
Strong Alignment of Interests: Management and directors continue to own approximately 8%3 of the Company's fully-diluted common equity as of
March 31, 2020.
"The spread of COVID-19 has led to extreme market volatility and dislocations in the financial markets, which have in turn caused significant yield spread widening on most fixed income assets, a sharp selloff in equities across the globe, volatility in interest rates, a severe drop in liquidity across virtually all asset classes, and significantly less transparency in the pricing of many asset classes," said
"Through the volatility, we have met all margin calls, strategically lowered our leverage, and maintained what we believe is a strong liquidity position. The lowering of our leverage has been strategic and opportunistic; none of our asset sales have been forced. In addition, the Board has set our next common stock dividend to
"Finally, our leadership team has effectively implemented our business continuity plans, and we continue to be fully operational. Our thoughts and sincere wishes are for the health and well-being of all of our stakeholders and their families, and moreover to all those around the world who are suffering through this pandemic."
|This estimated book value per common share includes the effect of the previously announced monthly dividend of
|In the event of default under a recourse borrowing, the lender's claim is not limited to the collateral (if any). Excludes repo borrowings on
|Management and directors' ownership includes common shares, operating partnership units, and operating partnership LTIP units held by officers and directors of the Company, and partners and affiliates of Ellington (including families and family trusts of the foregoing).|
Estimated book value per common share is subject to change upon completion of the Company's month-end and quarter-end valuation procedures relating to its investment positions, and any such change could be material (particularly in light of the significant volatility, lack of pricing transparency, and market dislocations discussed above). There can be no assurance that the Company's estimated book value per common share as of
The Company's estimates of the financial information above reflect estimates with respect to such information based on information currently available to management, and may vary from the Company's actual financial results as of and for the three-month period ending
This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve numerous risks and uncertainties. The Company's actual results may differ from its beliefs, expectations, estimates, and projections and, consequently, you should not rely on these forward-looking statements as predictions of future events. Forward-looking statements are not historical in nature and can be identified by words such as "believe," "expect," "anticipate," "estimate," "project," "plan," "continue," "intend," "should," "would," "could," "goal," "objective," "will," "may," "seek" or similar expressions or their negative forms, or by references to strategy, plans, or intentions. Examples of forward-looking statements in this press release include statements regarding the Company's book value per common share, its payment of dividends, its ability to meet margin calls, among others. The Company's results can fluctuate from month to month and from quarter to quarter depending on a variety of factors, some of which are beyond the Company's control and/or are difficult to predict, including, without limitation, changes in interest rates and the market value of the Company's securities, changes in mortgage default rates and prepayment rates, the Company's ability to borrow to finance its assets, changes in government regulations affecting the Company's business, the Company's ability to maintain its exclusion from registration under the Investment Company Act of 1940, the Company's ability to qualify and maintain its qualification as a real estate investment trust, or "REIT," and other changes in market conditions and economic trends, including changes resulting from the ongoing spread and economic effects of the novel coronavirus (COVID-19). Furthermore, forward-looking statements are subject to risks and uncertainties, including, among other things, those described under Item 1A of the Company's Annual Report on Form 10-K filed on
This release and the information contained herein do not constitute an offer of any securities or solicitation of an offer to purchase securities.