• Mon. Nov 30th, 2020

Pharma Oracle

Evolving Today for better Tomorrow

Investors Update: Great Ajax Corp. (NYSE: AJX)

On 02 April 2020, Great Ajax Corp. stock identified change of 7.79% away from 52-week low price and recently located move of -71.27% off 52-week high price. It has market worth of $109.29M and dividend yield of 28.89%. AJX stock has been recorded -63.33% away from 50 day moving average and -67.78% away from 200 day moving average. Moving closer, we can see that shares have been trading -47.70% off 20-day moving average.

Great Ajax Corp. (AJX) recently announces its results of operations for the quarter ended December 31, 2019. We focus primarily on acquiring, investing in and managing a portfolio of RPLs secured by single-family residences and commercial properties and, to a lesser extent, NPLs. In addition to our continued focus on residential RPLs, we also originate and acquire SBCs secured by multi-family retail/residential and mixed use properties and acquire multi-family retail/residential and mixed use and commercial properties.

Net interest income reduced $0.2M over the previous quarter primarily driven by a $0.6M decrease in gross interest income, partially offset by a decrease in interest expense of $0.4M. Loan interest income reduced $1.8M during the quarter ended December 31, 2019 due primarily to a reduction in the average balance of our investments in mortgage loans as we increase our investments in our Joint Ventures, as interest income from our Joint Ventures is net of servicing fees. Additionally, we held a high daily cash balance of $66.1M, and the weighted average yield on our loan portfolio declined as a result of extended durations for our loan portfolio as more borrowers transition from delinquent to current. As of December 31, 2019, about 76% of our loan portfolio have made at least the last 12 out of 12 payments, as contrast to about 13% at the time of purchase.

Interest income from our investments in debt securities and beneficial interests increased by $0.9M, driven by the increased average balance in our Joint Ventures and, by the recognition of a full quarter’s interest income on our 2019-E joint venture securities, which was created in the third quarter. Our investments in debt securities and beneficial interests which were made in the fourth quarter were on our consolidated balance sheet for a weighted average of 16 days during the quarter and therefore provided minimal benefit to the fourth quarter’s earnings.

Our overall cost of funds reduced about 18 basis points during the fourth quarter Because of our issuance of AAA-rated bonds from our third rated securitization, Ajax Mortgage Loan Trust 2019-F, (“2019-F”), as well as from lower interest rates on our repurchase lines of credit. We expect this trend to continue as we experience decreases in par coupons on new securitized bond issuance, lower repurchase facility costs on loans and Joint Venture interests and decreases in LIBOR and swap spreads.

Our operating expenses for the fourth quarter reduced from the third quarter primarily Because of the incentive fee we paid to our Manager, Thetis Asset Management LLC, in the third quarter. We paid no incentive fee to our Manager in the fourth quarter. During the quarter we recorded a $0.2M charge for the acceleration of deferred issuance costs as a result of the call of our senior bonds from our Ajax Mortgage Loan Trust 2017-A securitization.

We recorded $0.4M in impairments on our REO held-for-sale portfolio in real estate operating expense for the quarter ended December 31, 2019 contrast to $0.7M for the quarter ended September 30, 2019. We continue to liquidate our REO properties held-for-sale at a faster rate than we acquire properties, with 25 properties sold in the fourth quarter while nine were added to REO held-for-sale. This had the effect of materially reducing our taxable income during the fourth quarter, as foreclosures generally increase taxable income and REO sales generally reduce taxable income.

In November 2019 we completed a private capital raise transaction for our before wholly-owned subsidiary, Gaea Real Estate Corp., through which Gaea raised $66.3M in exchange for the issuance of 4.4M shares of its ordinary stock to third parties. The proceeds of the offering are predictable to be used to acquire additional multi-family, mixed use and triple net lease properties. The transaction resulted in the deconsolidation of Gaea from our consolidated financial statements. We retained a 23.2% ownership interest in Gaea which we will account for using the equity method. As a result, for 39 days of the quarter we received only 23.2% of the income from Gaea as opposed to 100% in previous quarters. Our investment in Gaea is included on our consolidated balance sheet at December 31, 2019 in Investment in associates.

During the quarter ended December 31, 2019 we co-invested with third-party institutional investors to form $309.1M of joint ventures, and retained $60.3M of varying classes of related securities, to end the quarter with $289.6M of investments in securities and beneficial interests. The investments in debt securities and beneficial interests made during the fourth quarter were on our balance sheet for a weighted average of only 16 days of the quarter and therefore provided minimal benefit to our earnings for the quarter ended December 31, 2019. We purchased 20.0% of each class of the securities of Ajax Mortgage Loan Trust 2019-G (“2019-G”), which purchased 870 RPLs and NPLs with UPB of $188.6M and an aggregate property value of $305.6M. We also purchased 20.0% of each class of the securities of Ajax Mortgage Loan Trust 2019-H (“2019-H”), which purchased 600 RPLs and NPLs with UPB of $120.5M and an aggregate property value of $223.3M. Based on the structure of the transactions we do not consolidate 2019-G or 2019-H under U.S. Generally Accepted Accounting Principles (“U.S. GAAP”). Interest income from our investments in debt securities and beneficial interests issued by our non-consolidated joint ventures is recognized by us net of servicing fees, which are incurred, instead, by each joint venture. This is different than our investments in mortgage loans where interest income is recognized on a gross basis with the offsetting servicing fee recorded as expense in a separate income statement line.

We purchased $6.2M of RPLs and $5.7M of NPLs with an aggregate UPB of $6.9M and $6.7M, respectively, and underlying collateral values of $10.2M and $9.2M, respectively, during the quarter ended December 31, 2019. We also originated one SBC loan with UPB of $0.6M that represented 88.6% of the underlying collateral value of $0.7M. These loans were purchased and included on our consolidated balance sheet for a weighted average of 30 days of the quarter. We ended the quarter with $1.2B of mortgage loans with an aggregate UPB of $1.3B.

Great Ajax Corp. noticed change of -16.73% to $4.43 along volume of 231090 shares in recent session compared to an average volume of 202.81K. AJX’s shares are at -68.83% for the quarter and driving a -66.53% return over the course of the past year and is now at -69.04% since this point in 2018.

Leave a Reply

Your email address will not be published. Required fields are marked *