I believe these very experienced investors will copy restructurings blueprints they have used many times before specifically from $DX and $NRZ (See Edens Presentation at Drive Shack Dec 2016) from Newcastle Investment Corp prior symbol $NCT now called Drive Shack $DS (kept $160M NOLs from $NCT) at Novation Companies, Inc. $NOVC by splitting into two companies both tax free:
- Tax Exempt MREIT $NOVC used to trade under NYSE $NFI NovaStar Financial Inc. under NYSE MREIT exemption just like, $DX (Mr. Edens CEO at Fortress restructured $DX with $NOVC Chairman 2000-03 via Fortress 100% ownership of Capstead Mortgage $CMO, now traded $FBRT. Edens was CoB of both Capstead and Fortress at this time 2000-03). $NOVC aka Fortress, EJF Capital also hold $NOVC only Sr Debt which in my view is a ruse to take common. Who knows who is buying $NOVC common and where they are finding the shares? $NFI aka $NOVC holds cleanup call rights (CCR defined in Section 5.04 of the Service Rights Transfer Agreement SRTA see back of $NOVC Q3 2007 10Q) that control the future use of Billions of rich, seasoned collateral assets ($3B RMBS, Non-QM portfolio 600 Bpts WAC see Edgar Reports for Bond Remittance Reports and Pooling Service and Trust Agreements). These collateral assets hold 600 Bpts Weight Average Coupons and are seasoned. These collateral assets can be, and I believe will be leveraged ($DX and $NRZ use 15:1) and resecuritized (NIMs of 500 Bpts) into new fresh dividend as tax exempt MREIT see Service Rights Transfer Agreement Section 5.04 attached and in the back of NOVC Q3 2007. I believe Fortress or EJF Capital aka Wesley Edens, or Manny Friedman or combination will take the lucrative management fees. Lucrative Management Fees just like $NRZ New Residential Investment Corp paid Fortress (2019 Fortress cashed $170M fee from NRZ shareholders per 2020 10K plus DIVIDENDS). I share this because I believe Mr. Market deserves to know what I think Wesley Edens, CEO of Fortress subsidiary of Softbank $SFTBY, Manny Emanuel John Friedman CEO of EJF Capital owned by White Mountains Capital $WTM, Mass Mutual and sub-Barings are doing at Novation Companies Inc. $NOVC with Fortress’ ex co investor from $DX Barry Igdaloff, $NOVC Chairman of the Board. ex MREIT New Novastar Financial formerly traded over NYSE symbol $NFI holds cleanup call rights CCR per SRTA Sec 5.04 (back of Q3 2007) to most of the est $3 Billion RMBS, Non-QM portfolio of collateral assets 6% WAC, I expect these assets can be leverage & resecuritized into new dividend (between $3.30 per share to as high as $20.00 per share annually) just like these investors have done many times including Dynex Capital $DX and New Residential Inv www.newresi.com $NRZ.
- If NOVC uses same leverage as $DX 15:1 that generates $45B risk adjusted portfolio (note Sec 5.04 does not apply to the entire $3 B portfolio so this is an illustration) x NIM net interest margins of 500 Bpts or $2.3B NIM less some SGA. If you use 116M commons shares outstanding this works out to $20.00 annual common dividend. If Mr. Market prices the dividend at same yield as Dynex Capital NYSE $DX that produces at $220/Share for new $NOVC MREIT new $NFI. These investors would turn a suppressed public company into two tax free companies one worth $220/share or their 90M common would be worth est $20 Billion plus dividends and plus management fees. The reality is even if Wesley Edens, Fortress and Manny Friedman, EJF Capital with Mass Mutual and sub-Barings backed by White Mountains Capital and Jefferies $JEF produced only $1.00 annual common dividend if priced at $DX yield the pps would be $11.00 per share and they still own tax free www.healthcare-staffing.com HCS with $730M NOLs.
Now the CCR are triggered when the actual Bond Balance hits 10% trigger (I believe this is all but complete). Leading Quants/Portfolio Managers such as Fortress & EJF like to buy the actual Bonds back at discount before triggering the CCR, but it can take longer because they need to hunt down who owns the actual bonds. Fortress was paid in 2019 est $170M to manage $NRZ per NRZ 2020 10K. Fortress or other agent of $NOVC could be buying the actual Bonds back at discount today. The CCR rights just give $NOVC control over the underlying collateral assets. Let us assume they buy the Bonds back before triggering the CCR at 50% discount. $NOVC aka new $NFI gains access to $3B of collateral for 50% or $1.5B which increase ROE and decreases dilution from PS Series F funding.
2. The Second Tax free company thanks to $730M NOLs is www.healthcare-staffing.com HCS would be like gravy for common investors. CDOs, Fortress, EJF Capital + their co investors $NOVC Board led by Barry Igdaloff and Mass Mutual and sub Barings make their big win via the above MREIT and CCR. HCS is gravy like the way Drive Shack $DS is gravy for Fortress and their co investors embedded in their cozy huddle. Wesley Edens is Chairman of the Board at Drive Shack $DS. Ask him for his Dec 2016 Shareholder Presentation. I believe it is more likely then not that HCS will be merged with Hudson Global Inc. $HSON allowing Chuck Gillman, Jeff Eberwein and their cabal of investors many appointees to NOVC board used to launder over half the 16M RSU taken to tap into the NOLs. See $HSON Form 4s Jeff Eberwein has been buying HSON Common hand over fist. Why $HSON performance is more then average. Why would Mr. Jeff Eberwein be buying $HSON common and as CEO and COB of $HSON the organization has been buying back its own stock see Treasury Stock on HSON balance sheet. Igdaloff brought Chuck Gillman, Jeff Eberwein into $NOVC Board. It was Barry Igdaloff and Howard Amster's fiduciary duty to protect $NOVC shareholder value from these vultures yet all he and Howard Amster have done is hand them over 10M RSUs at pennies. It is obvious that Gillman, Eberwein appointed to NOVC Board David Pointer, Lee Keddie and Tim Eriksen to take millions in RSUs at pennies.
Now we see why Fortress Co CEOs Peter Briger and Wesley Edens stall at Novation Companies Inc. $NOVC until they can buy Fortress back from Masa Son, CEO of Softbank, probably at DISCOUNT. Have they played shorty?