Chimera Investment Corporation (NYSE:CIM) Cautious About Interest Rate Hikes

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Dallas, Texas 03/03/2014 (FINANCIALSTRENDS) – Chimera Investment Corporation (NYSE:CIM), which is a $3.28 billion market capped real estate investment trust released its restated results for quarter which ended on 31st March 2013.  The firm which buys “residential mortgage loans, commercial mortgage loans, and real estate related securities” and offers returns to its investors from the profits it makes by charging interest on its investments. The fund is managed by an independent body called “Fixed Income Discount Advisory Company” which is in turn a 100 percent owned sub of Annaly Capital Management, Inc.

The firm reported in its restated statement for quarter ending March 31st 2013, the REIT firm had invested close to 76.4 percent of its total portfolio into Non Agency based RMBS, while agency RMBS attracted agency RMBS, while the reminder 9.4 percent was into residential loans.

Giving a mixed guidance for the next few months, the management of Chimera Investment Corporation (NYSE:CIM) has predicted that income from interest will likely go up, given the tapering measures brought in by Fed in the past couple of months. It has also linked its performance to the value of the collateral and mortgaged property on its books. It also expects the macro and the micro economic trends to directly have a impact on the profits to be earned by the firm. The firm also predicted that with the slow but steady rise in interest rate, the likelihood of prepayment of loans by customers is likely to go down. This is expected to help the company earn more interest income.

Chimera Investment Corporation (NYSE:CIM) management also disclosed that, “Rising interest rates, however, increase our financing costs which may result in a net negative impact on our net interest income. In addition, if we acquire Agency and Non-Agency RMBS collateralized by monthly reset adjustable-rate mortgages which might get impacted by rising interest rates.”

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