24 unchanged sentences
In particular, the portion of our real estate securities and loan portfolios with fixed-rate coupons would be expected to decrease in value more severely than that portion with a floating-rate coupon.
−Removed: because fixed-rate coupon assets tend to have significantly more duration, or price sensitivity to changes in interest rates, than floating-rate coupon assets.
+Added: This is because fixed-rate coupon assets tend to have significantly more duration, or price sensitivity to changes in interest rates, than floating-rate coupon assets.
Fixed-rate assets currently represent a majority of our portfolio.
11 unchanged sentences
Agency RMBS (0.06)
−Removed: Agency RMBS subtotal (0.10)
Securitized Residential Mortgage Loans 2.95
−Removed: Real Estate Securities and Legacy WMC Commercial Loans 0.33
−Removed: Hedges on securitized products (0.55)
−Removed: Securitized products subtotal 3.22
+Added: Real Estate Securities 0.42
+Added: Hedges on securitized investments (0.53)
+Added: Securitized investments subtotal 2.84
Residential Mortgage Loans (3) 0.61
1 unchanged sentence
Residential Mortgage Loans subtotal 0.04
−Removed: Legacy WMC Convertible Notes (0.04)
+Added: Commercial Loans (0.01)
+Added: Senior Unsecured Notes (0.25)
(1) Duration related to financing arrangements is netted within its respective line items.
27 unchanged sentences
The information set forth in the interest rate sensitivity table above and all related disclosures constitute forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act.
−Removed: Actual results could differ significantly from those estimated in the foregoing interest rate sensitivity table.
+Added: Actual results could
+Added: differ significantly from those estimated in the foregoing interest rate sensitivity table.
See below for additional risks which may impact the fair value of our assets, GAAP equity and net income.
19 unchanged sentences
Initial margin works differently.
−Removed: Collateral posted to meet initial margin requirements is intended to create a safety buffer to benefit our counterparties if we were to default on our payment obligations under the terms of the swaps and our counterparties
−Removed: were forced to unwind the swap.
+Added: Collateral posted to meet initial margin requirements is intended to create a safety buffer to benefit our counterparties if we were to default on our payment obligations under the terms of the swaps and our counterparties were forced to unwind the swap.
Initial margin on our centrally cleared trades varies from day to day depending upon various factors, including the absolute level of interest rates and the implied volatility of interest rates.
5 unchanged sentences
local real estate conditions (such as an oversupply of housing);
−Removed: natural disasters, the effects of climate change (including flooding, drought, and severe weather) and other natural events;
+Added: natural disasters, the effects of climate change (including flooding, drought, wildfire, tornados and severe weather) and other natural events;
construction quality, age and design;
2 unchanged sentences
Decreases in property values could cause us to suffer losses and reduce the value of the collateral underlying our investment portfolio as well as the potential sale proceeds available to repay our loans in the event of a default.
−Removed: In addition, substantial decreases in property values can increase the rate of strategic defaults by residential mortgage borrowers which can impact and create significant uncertainty in the recovery of principal and interest on our investments.
+Added: In addition, substantial decreases in property values can increase the rate of strategic defaults by residential mortgage borrowers which can impact and create significant uncertainty in
+Added: the recovery of principal and interest on our investments.
We are exposed to the risk of potential credit losses from an unanticipated increase in borrower defaults as well as general credit spread widening on any non-agency assets in our portfolio.
1 unchanged sentence
Our Manager’s pre-acquisition due diligence process includes the evaluation of, among other things, relative valuation, supply and demand trends, the shape of various yield curves, prepayment rates, delinquency and default rates, recovery of various sectors and vintage of collateral.
−Removed: The potential effects of sustained inflation, rising mortgage rates, the Federal Reserve's monetary policy actions, and the ongoing COVID-19 pandemic may cause an increase in credit risk of our credit sensitive assets.
+Added: The potential effects of sustained inflation, elevated mortgage rates, and the Federal Reserve's monetary policy actions may cause an increase in credit risk of our credit sensitive assets.
Any future period of payment deferrals, forbearance, delinquencies, defaults, foreclosures or losses will likely adversely affect our net interest income from residential loans and RMBS investments, the fair value of these assets, our ability to liquidate the collateral that may underlie these investments and obtain additional financing and the future profitability of our investments.
10 unchanged sentences
In addition, our interest rate hedges are structured in part based upon assumed levels of future prepayments within our mortgage loan or real estate securities portfolio.
−Removed: If prepayments are slower or faster than assumed, the life of the real estate securities or
−Removed: mortgage loans will be longer or shorter than assumed, respectively, which could reduce the effectiveness of our Manager’s hedging strategies and may cause losses on such transactions.
+Added: If prepayments are slower or faster than assumed, the life of the real estate securities or mortgage loans will be longer or shorter than assumed, respectively, which could reduce the effectiveness of our Manager’s hedging strategies and may cause losses on such transactions.
Our Manager seeks to mitigate our prepayment risk by investing in real estate assets with a variety of prepayment characteristics.
2 unchanged sentences
Consequently, while we use interest rate swaps and other hedges to protect against moves in interest rates, such instruments will generally not protect our net book value against basis risk.
−Removed: Capital Market Risk
+Added: Capital Markets Risk
We are exposed to risks related to the equity capital markets, and our related ability to raise capital through the issuance of our common stock, preferred stock or other equity instruments.
3 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.