LOS ANGELES - Apex Mortgage Capital Inc. said it expects a loss on investment transactions in the second quarter of about $7.5 million and that its board of directors has declared a second-quarter dividend of 35 cents per share.
The company announced that it had sold $101.6 million of investment securities to reduce the risk in its portfolio. As a result of the securities sales and a writedown of an equity investment, Apex said, it will report the loss on investment transactions.
"Rising interest rates and the widening of yield spreads between mortgage securities and U.S. Treasury notes continues to pressure the value of the company's fixed-income portfolio," said Philip A. Barach, chief executive officer. "While it was a difficult decision to recognize losses, we believe it was prudent to reduce leverage in this very volatile market. It is difficult to predict when the volatility in interest rates and spreads will abate."