Luminent Moving Forward with Efforts to Enhance Its Liquidity
07 Agosto 2007 - 10:02PM
PR Newswire (US)
SAN FRANCISCO, Aug. 7 /PRNewswire-FirstCall/ -- Luminent Mortgage
Capital, Inc. (NYSE:LUM) today reported it is moving forward with
its efforts to enhance its liquidity and preserve the value of its
portfolio of assets which is comprised substantially of high
quality mortgage loans. Luminent emphasized that, unlike other
companies that are being affected by the sudden and extraordinary
disruptions in the secondary and national real estate markets, it
is an investor in, and not an originator of, mortgage loans.
Luminent purchases its mortgage loans only after extensive due
diligence. Luminent stressed that, while the market disruption and
the attendant visibility resulting from the disruption has created
for the moment an environment of concern, speculation and in some
instances overreaction, its business model has a proven track
record of viability and success. Specifically, Luminent pointed out
that prime quality whole loans comprised the bulk of its assets as
of June 30. These loans had an average FICO score of 715 and a
moderate loan-to-value ratio of 71% on average, net of mortgage
insurance. Luminent's credit process is stringent. Luminent
independently validates property values on each and every loan it
buys. As a result of its due diligence, Luminent has experienced
lower delinquencies than the prime mortgage market. The remainder
of Luminent's portfolio consists of mortgage backed securities, the
vast majority of which is rated AAA. Luminent has no sub prime
first loss exposure. Luminent is not subject to loan repurchase
risk that is currently impacting certain loan originators in this
environment. Luminent recently reported that, because the financing
methods the mortgage industry normally relies upon have
deteriorated in an unprecedented fashion, it has experienced a
significant increase in margin calls on its highest quality assets,
especially since August 3, and a decrease on the financing advance
rates provided by its lenders. Trez Moore, Chief Executive Officer
of Luminent, stated, "Luminent is committed to undertaking all
appropriate initiatives with respect to its business. With the
expertise of our strong management team, which has consistently
proven its ability to successfully execute on our business model,
we are moving forward with our efforts to address the company's
liquidity needs caused by the current mortgage market
dislocations." This news release and Luminent's filings with the
Securities and Exchange Commission contain forward-looking
statements under the Private Securities Litigation Reform Act of
1995. Forward-looking statements convey Luminent's current
expectations or forecasts of future events. All statements
contained in this press release other than statements of historical
fact are forward-looking statements. Forward-looking statements
include statements regarding our financial position, business
strategy, budgets, projected costs, plans and objectives of
management for future operations. The words "may continue,"
"estimate," "intend," "project," "believe," "expect," "plan,"
"anticipate" and similar terms may identify forward-looking
statements, but the absence of such words does not necessarily mean
that a statement is not forward-looking. These forward-looking
statements include, among other things, statements about: * the
effect of the flattening of, or other changes in, the yield curve
on our investment strategies; * changes in interest rates and
mortgage prepayment rates; * Luminent's ability to obtain or renew
sufficient funding to maintain its leverage strategies and support
its liquidity position; * continued creditworthiness of the holders
of mortgages underlying Luminent's mortgage-related assets; * the
possible effect of negative amortization of mortgages on Luminent's
financial condition and REIT qualification; * the possible impact
of Luminent's failure to maintain exemptions under the 1940 Act; *
potential impacts of Luminent's leveraging policies on its net
income and cash available for distribution; * the power of
Luminent's Board of Directors to change its operating policies and
strategies without stockholder approval; * effects of interest rate
caps on Luminent's adjustable-rate and hybrid adjustable-rate loans
and mortgage backed securities; * the degree to which Luminent's
hedging strategies may or may not protect it from interest rate
volatility; * Luminent's ability to invest up to 10% of its
investment portfolio in residuals, leveraged mortgage derivative
securities and shares of other REITs as well as other investments;
* volatility in the timing and amount of Luminent's cash
distributions; * Luminent's ability to purchase sufficient
mortgages for its securitization business; and * the other factors
described in Luminent's Form 10-K, Form 10-Q and Form 8-K reports,
including those under the captions "Management's Discussion and
Analysis of Financial Condition and Results of Operations," "Risk
Factors" and "Quantitative and Qualitative Disclosures about Market
Risk." Luminent cautions you not to place undue reliance on these
forward-looking statements, which speak only as of the date of this
press release. All subsequent written and oral forward-looking
statements attributable to Luminent or any person acting on its
behalf are expressly qualified in their entirety by the cautionary
statements contained or referred to in this press release. Except
to the extent required by applicable law or regulation, Luminent
undertakes no obligation to update these forward-looking statements
to reflect events or circumstances after the date of this press
release or to reflect the occurrence of unanticipated events.
Contact: Robert Siegfried Kekst and Company (212)521 4832
DATASOURCE: Luminent Mortgage Capital, Inc. CONTACT: Robert
Siegfried of Kekst and Company, +1-212-521-4832
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