Fortress is NRZ but Fortress owns 28% of Novation Companies, Inc. OTC NOVC which holds rights to call back collateral assets to most of $3B portfolio of NQM RMBS Cleanup call Rights. I believe Fortress & EJF Capital (Fd FBR Manny Friedman) will copy Fortress reorganization of NCT now called DS by spinning off top 10 MREIT Novastar Financial and position NOVC with 5x NOL of NCT as a SPAC with $728M NOLs. Read on
My thesis states powerful investors led by Wesley Edens, Peter Briger, Co-CEOs at Fortress & Thomas Finke, CIO at Mass Mutual, will duplicate Fortress' Newcastle NCT blueprint at Novation Companies, Inc. NOVC. NOVC has the same attributes as Newcastle NCT now called Drive Shack, DS & these investors own over 50% of common shares. See deck below slide 4; NCT spun off as new public entities 3 tax exempt MREITs including NRZ & left $160M NOLs in Drive Shack DS. http://ir.driveshack.com/Cache/IRCache/a1b2ee64-5797-45c5-953a-7aed241fbd80.PDF?O=PDF&T=&Y=&D=&FID=a1b2ee64-5797-45c5-953a-7aed241fbd80&iid=4040318
NOVC owns 100% of NovaStar Financial Inc. NFI which operated as tax exempt MREIT up to 07’ meltdown & was saved in Ch 11 by these investors. NFI produced $40B NQM loans + paid out 100% of their taxable income in dividends. NOVC led by Wesley Edens can use rights to call back collateral assets & leverage into a new dividend. NOVC cleanup call rights CCR per Service Rights Transfer Agreement SRTA sec 5.04 (attached to the back of NOVC Q3 2007) on $3 Billion RMBS-NQM portfolio carry weighted average coupons WAC 600 Bpts. NOVC portfolio management team was regarded so highly by Mass Mutual & sub Barings they invested $48M (common/PS Ser D-1) into NOVC then symbol NFI. Wes Edens did this exact same reorganization at Newcastle NCT/DS. NOVC $728M NOLs are five times that of NCT aka DS slide 11 link and with HCS www.healthcare-staffing.com $64M can be positioned as SPAC and expanded. Fortress like Bill Ackman is an expert in SPACs.
Fortress owns 31M NOVC common shares 28%? Mass Mutual Barings owns 19.3M. Fortress is very incentivized to turn little cash invested in Sr Debt via CDOs into over a billion plus annual dividends. Why has this plan not been announced? You’ll have to ask Wesley Edens, Peter Briger or Manny Friedman.