Baby Bond Target Updates for PMTU, MFAN, MFAO, CIMN, CIMO

We recently added two new baby bonds to coverage and adjusted our targets for the baby bonds from Gladstone Investment (GAIN) and Ready Capital (RC).

That leaves 5 baby bonds needing updates today:

• PMTU (PMTU)
• MFAN (MFAN)
• MFAO (MFAO)
• CIMN (CIMN)
• CIMO (CIMO)

These are issued from 3 REITs and it’s easy to match them up using the first 3 letters of the bond tickers:

• PennyMac Mortgage (PMT)
• MFA Financial (MFA)
• Chimera Investment (CIM)

Factors Impacting Targets

There are 3 main factors that influence baby bond targets:

1. Treasury rates.
2. Risk level (spread over Treasury rates)
3. Time to maturity (shorter is usually better but also results in smaller ranges).