MFA Financial extends forbearance agreement until June 26

By Sarah Lizee

Olympia, Wash., June 1 – MFA Financial, Inc. entered into a third forbearance agreement with some counterparties to its various repurchase agreement financing arrangements, according to a press release.

Under a new forbearance agreement that the company entered into on Monday, the counterparties have agreed to continue to forbear from exercising any rights or remedies under their respective repurchase agreements with the company, including selling collateral to enforce margin calls, through June 26.

The third forbearance agreement extends the forbearance period agreed to under the previously announced forbearance agreement that the company entered into with counterparties on April 27, which was set to expire at 4:30 p.m. ET on Monday.

The terms and conditions of the third forbearance agreement are almost identical to those under the second forbearance agreement, the company said.

All of the company's remaining repurchase agreement counterparties have agreed to participate in the third forbearance agreement. The company's aggregate repurchase obligations outstanding as of May 29 were about $3.8 billion.

Since entering into an initial forbearance period on April 10, the company's obligations under its and its subsidiaries repurchase agreements have decreased by about 35%. This reduction occurred primarily from ongoing sales of certain assets and the payoff of the associated repurchase obligations and unpaid margin calls.

During the period covered by the third forbearance agreement, the company said it intends to continue to explore other potential transactions to further reduce its obligations under its existing repurchase agreements, source financing that is generally more durable than existing funding alternatives and raise cash to bolster its liquidity. In addition, the company said it will continue to engage in discussions with its counterparties for further forbearance as and if needed.

MFA is a New York real estate investment trust that primarily invests, on a leveraged basis, in residential mortgage assets.

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