- The mortgage REIT preferreds space went through a roller coaster ride in 2020 which has opened up attractive opportunities in the sector.
- Arlington Asset Investment preferreds, particularly the 8.25% Series C - AAIC.PC - continue to trade very cheap relative to its credit metrics.
- Very likely this divergence is caused by investors worried about the common dividend suspension and a relatively large book value drop over Q1 last year.
- One thing to watch out for is whether the economic leverage starts creeping up back to double-digit levels.
For further details see:
Arlington Asset Investment: A Constructive View On Preferreds