Ocwen Asset Investment Corp. Responds To NYSE And Investor Inquiries
WEST PALM BEACH, Fla., Sept. 17 /PRNewswire/ -- Ocwen Asset Investment Corp.'s (NYSE: OAC) common stock price closed yesterday, September 16, 1998, at $6.125, down $1.6875 for the day. OAC announced that it had received a request from the New York Stock Exchange (the "NYSE") to issue a public statement indicating whether there were any corporate developments which may explain yesterday's market activity. OAC also received investor inquiries in response to yesterday's market activity, many of which focused on OAC's portfolio of residual securities.
In response to those inquiries, OAC pointed out that in recent weeks, the stock prices of many entities that hold residual securities have been negatively affected, and OAC provided the following information:
* OAC's $415 million portfolio of securities available for sale includes
approximately $268 million of unrated residential subprime residuals.
* In the unlikely event of prepayment of an entire pool of mortgages
underlying any particular OAC residual, OAC would receive all of the
related over-collateralization reserves and prepayment penalties.
* Of the $268 million, $122 million represents seasoned residuals
(i.e., securitized between 1994 and 1997) and $146 million represents
unseasoned residuals (i.e., securitized in 1998).
* With respect to the seasoned residuals, over-collateralization reserves
are funded at approximately $116 million.
* With respect to the unseasoned residuals, (i) over-collateralization
reserves are funded at approximately $16 million, (ii) 85% of the
underlying loans are adjustable, (iii) the weighted average coupon of
the underlying loans is 9.8%, and (iv) 73% of the underlying loans have
prepayment penalties.
* Yesterday's closing price for OAC's common stock of $6.125 per share
represents a market value of $116 million, which is a discount of $158
million to the $274 million in shareholder's equity at June 30, 1998.
OAC will continue to closely monitor the situation with respect to its portfolio of residual securities. In addition, OAC anticipates announcing its regular quarterly dividend early next week.
OAC, a hybrid mortgage real estate investment trust (or REIT) headquartered in West Palm Beach, Florida, invests in distressed commercial real estate, subordinate commercial mortgage-backed securities and subordinate and residual interests in residential mortgage-backed securities. |
