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AG Mortgage Investment Trust (MITT) Q2 2021 Earnings Call Transcript – Motley Fool

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AG Mortgage Investment Trust (NYSE:MITT)
Q2 2021 Earnings Call
Jul 30, 2021, 8:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Welcome to AG Mortgage Investment Trust second-quarter 2021 earnings call. My name is Sylvia, and I’ll be your operator for today’s call. [Operator instructions] Please note that this conference is being recorded. I will now turn the call over to Jenny Neslin.

Jenny, you may begin.

Jenny NeslinGeneral Counsel and Secretary

Thank you, Sylvia. Good morning, everyone, and welcome to the second-quarter 2021 earnings call for AG Mortgage Investment Trust. With me on the call today are David Roberts, our chairman and CEO; and T.J. Durkin, our president; Nick Smith, our chief investment officer; and Anthony Rossiello, our chief financial officer.

Before we begin, please note that the information discussed in today’s call may contain forward-looking statements. Any forward-looking statements made during today’s call are subject to certain risks and uncertainties, which are outlined in our SEC filings, including under the headings cautionary statement regarding forward-looking statements, risk factors and management’s discussion and analysis. The company’s actual results may differ materially from these statements. We encourage you to read the disclosure regarding forward-looking statements contained in our SEC filings, including our most recently filed Form 10-K for the year ended December 31, 2020, and our first-quarter 10-Q.

Except as required by law, we are not obligated and do not intend to update or to review or revise any forward-looking statements, whether as a result of new information, future events or otherwise. During the call today, we will refer to certain non-GAAP financial measures. Please refer to our SEC filings for reconciliations to the most comparable GAAP measures. We will also reference the earnings presentation that was posted to our website this morning.

To view the slide presentation, turn to our website, www.agmit.com, and click on the link for the second-quarter 2021 earnings presentation on the home page in the investor presentation section. Again, welcome to the call, and thank you for joining us today. With that, I’d like to turn the call over to David.

David RobertsChairman and Chief Executive Officer

Thank you very much, Jenny, and good morning to everybody. Since our last call, AG Mortgage Investment Trust has made great progress in our transition to a company focused on residential mortgage origination and securitization. On the buy side of our business, in the second quarter, we purchased $446 million of non-QM loans from our affiliate, Arc Home, as well as third parties. In June, we completed a non-QM securitization of $224 million, raising non mark-to-market, non-recourse financing on these assets.

Additionally, Arc Home doubled its production of non-QM loans during this quarter to $376 million. Going forward, we intend for our business model to be fueled primarily by non-QM and other residential origination followed by securitizations on a quarterly or more frequent basis. On the sell side of our business, we have sold all of our CMBS and certain RMBS positions throughout the quarter and subsequent to quarter end, supporting our continued transition. We also have good reason to believe we are progressing toward being paid off on our two remaining commercial real estate loans.

The CMBS sales have resulted in favorable gains during and subsequent to quarter end, and potential payoffs of the commercial loans are expected to be favorable to our second-quarter remarks. These completed and anticipated sales provide ample liquidity to fund continued expansion of our go-forward business model. In terms of our financial results for the quarter, our book value increased by 3%, driven by earnings of $0.70 per share. This is after accounting for the declared second-quarter dividend of $0.21 per share.

Both per share numbers are on a post-split basis. Core earnings for the quarter were approximately breakeven. However, the definition we use for core earnings does not capture important elements of our go-forward business strategy. Specifically, core earnings do not include MITT share of the gain that Arc Home recognizes when it sells loans to us, nor does it include earnings that MITT recognizes when we securitize the loans purchased from both Arc Home and third parties.

As I mentioned before, the sales of commercial assets have and are expected to continue to increase our liquidity. This comes at the short-term cost of reduced net interest margin. But more importantly, in the longer term, this liquidity will enable us to continue growing our origination securitization strategy, a strategy, we believe, offers a superior risk reward to AG Mortgage Investment Trust and its shareholders. For our dividend policy going forward, we will be looking most closely at those earnings metrics that most accurately reflect the evolution of our business strategy.

And as we always do in our dividend policy, we will consider not only the current quarter but our outlook for earnings over the intermediate term. Thanks very much. And with that, I will turn it over to T.J. Durkin.

T.J. DurkinPresident

Thank you, David, and good morning, everyone. To dig a bit deeper into the company’s activity during the quarter, we were active in purchasing $446 million of non-QM loans during the quarter from five originators, including our mortgage affiliate, Arc Home, which originated $376 million during the quarter with MITT purchasing approximately 50% of that production. MITT contributed loans into two securitizations during the quarter, and we intend to be very disciplined with regards to the pacing of our securitizations to de-risk our warehouse lines. In other asset classes, we continue to prudently dispose of non-core assets and repositioning to MITT’s forward-looking strategy by selling CMBS and other RMBS securities where we don’t have any control or access to the underlying whole loans.

During the quarter, we also reduced our exposure to agency MBS as we thought the basis had reached a point where further tightening was unlikely. Subsequent to quarter-end, we sold the remaining CMBS positions and a slight gain from Q2 marks, generating gross proceeds of $34 million, or approximately $15 million of equity proceeds. And moving on to our capital activity during the quarter, we successfully utilized our ATM program to raise $3.1 million of fresh capital by issuing 226,634 shares at an average price of $14.21 per share adjusting for the split. We also completed our fifth exchange with a preferred holder, exchanging 240,861 shares of preferred for 429,802 shares of common.

This brings our cumulative preferred to common exchange notional at approximately $51 million of par value. And lastly, we completed a one-for-three reverse stock split, which went effective July 22 with the ultimate goal of reducing volatility in the stock price into the future. Now, turning to slide six. Our investment portfolio grew slightly over the quarter based on the rotation I previously mentioned out of agency MBS and CMBS into non-QM whole loans.

Turning to slide seven. We made progress increasing our allocation to non-QM by nearly doubling the fair value as a percentage of our investment portfolio from 19% to 37% this quarter. Also, given the strength in the housing market, we are seeing solid performance with regard to our land-related financing, and we expect lot takedowns to run this asset class off organically over the coming 12 to 18 months while we earn a healthy yield. On slide eight, we present our CMBS and commercial real estate exposure.

As previously mentioned, subsequent to quarter end, we exited the single asset, single borrower CMBS securities for gross proceeds of $33.7 million. Currently, MITT only has two remaining commercial real estate loans left under our commercial designation, and we wanted to provide some more detail today. Commercial loan K is a first lien construction loan to a recently completed and fully opened destination hotel in Times Square. The loan continued making interest payments during COVID, but its original maturity date was due in May of this year.

MITT’s loan exposure is part of a larger consortium and is actively engaged with the lender group on working toward a productive resolution in the near term. However, we can’t guarantee such resolution will occur. We are very comfortable with our basis in the finished product. Commercial loan L is a fully drawn loan to a hotel located off the Magnificent Mile in Downtown Chicago.

Immediately following the initial COVID shutdown, we completed a modification with the sponsor in September of 2020, turning off the cash coupon and letting the deferred interest accumulate. However, we did not accrue interest income during this quarter — during this period. In exchange for the interest deferral, we received an additional $2.1 million of equity. We remain in close contact with the sponsor and have seen operating metrics continue to improve into the larger reopening.

On slide nine, you can see we continue to be able to create an agency MBS book with better prepayment performance due to our size and selectiveness when purchasing specified pools. A reduction in agencies was solely based on relative value, not based on performance. We will continue to use agency MBS to absorb excess liquidity when at prudent valuations and to meet our ’40 act tests. And lastly, in June, we entered into an agreement to sell all our remaining excess MSRs, which we’ll settle during the third quarter.

With that, I’ll turn the call over to Nick.

Nick SmithChief Investment Officer

Thank you, T.J., and good morning, everyone. Turning to slide 10. Year to date, we’ve acquired over $650 million of non-QM loans with over $250 million acquired from our affiliate Arc Home. In July, we increased our uncommitted warehouse capacity to $1.1 billion to accommodate future acquisitions while simultaneously terming out approximately $224 million of non mark-to-market and non-recourse debt.

We also securitized approximately $171 million of non-QM loans alongside other Angelo Gordon funds within an unconsolidated joint venture. The remaining assets held in this joint venture are primarily retained interest from other prior — or from prior securitizations. The tables on this page show the continued delinquency curing over the past year for our non-QM portfolio, along with collateral characteristics of our current borrower base. Subsequent to quarter end, we also entered into agreements to acquire GSE-eligible nonowner-occupied pools.

In connection with these acquisitions, we added $500 million of uncommitted warehouse capacity specifically for GSE-eligible loans. We expect these credits to continue to offer attractive risk-adjusted returns and look forward to adding additional sellers and capacity. Moving on to slide 11. This page provides a high-level summary of the performance of our credit-sensitive loan positions over the past 12 months.

As you can see, this portfolio has benefited from strong housing tailwinds and historically low mortgage rates. Prepayment speeds have increased significantly and approximately 75% of the borrowers that received COVID-related assistance are either contractually current or making payments on a loss mitigation plan. Over the past year, approximately 30% of the portfolio has been liquidated through a combination of opportunistic loan sales, voluntary and involuntary prepayments. Turning to slide 12.

As mentioned in previous quarters, Arc Home, our licensed mortgage origination affiliate, continues to benefit from being one of the first originators to reenter the non-QM business. The tables below clearly show the benefit of these early investments as Arc Home’s non-QM volumes offset declines in agency volumes and was able to mitigate margin compression during the quarter. Mark-to-market losses in Arc Home’s MSR portfolio driven by lower nominal yields and a full flattening of the curve generated pre-tax net losses of $3.7 million resulting in $2.7 million of losses from MITT, which does not include $1.4 million of gains recognized by Arc Home in connection with its mortgage loan sales to MITT. With that, I’ll turn it over to Anthony.

Anthony RossielloChief Financial Officer

Thank you, Nick, and good morning. Before providing an update on the second quarter, I wanted to reiterate that we completed a one-for-three reverse stock split post quarter end, which became effective on July 22. This reduced our common shares outstanding from approximately 48.5 million to 16.2 million. As a result, you will see that we adjusted all common share and per share metrics within our press release, earnings presentation and 10-Q on a retroactive basis to reflect the reverse split for all periods presented.

With that being said, during the first quarter, we reported net income available to common stockholders of approximately $10.9 million or $0.70 per fully diluted share. Earnings during the quarter were driven by mark-to-market gains on residential and commercial assets within our portfolio, along with realized gains from the sales of certain RMBS and CMBS. These gains were offset by mark-to-market losses within our interest rate swap portfolio driven by the decline in interest rates during the quarter, as well as the previously mentioned loss from our 45% equity method investment in Arc Home, resulting from mark-to-market losses on its MSR portfolio. Operating expenses increased slightly from the first quarter.

However, this was attributable to transaction expenses related to the non-QM securitization that occurred in June. On slide 14, we provide a reconciliation of our book value per common share, which increased by $0.41 during the quarter. This increase reflects our current quarter earnings offset by the preferred and common dividends declared during the second quarter. And you’ll also see the increases related to a preferred stock exchange transaction entered into during the quarter, as well as net proceeds raised from issuing common stock through our ATM program approximating $3 million.

As discussed on our previous earnings call, we also disclosed adjusted book value per common share of $14.72, which is computed based on total equity less the entire liquidation preference of our preferred stock. Turning to slide 15. We disclosed a reconciliation of GAAP net income to core earnings for the second quarter, where you will see core earnings was breakeven for the quarter. One item to note is that core earnings does not include $1.4 million of gains Arc Home recognized during the quarter on loans sold to us.

Lastly, we ended the quarter with total liquidity of $71 million, which is inclusive of $64 million of cash, and $7 million of unlevered agency RMBS. This improvement in liquidity from the first quarter was a result of the previously mentioned two non-QM securitizations transacted along with the sale proceeds on our MBS portfolio offset by the purchase activity to grow our non-QM portfolio. This concludes our prepared remarks, and we would now like to open the call for questions. Operator?

Questions & Answers:

Operator

[Operator instructions] And our first question comes from Doug Harter from Credit Suisse.

Doug HarterCredit Suisse — Analyst

Thanks. Can you just talk about the level of competition kind of in the QM market today and how that — how returns still look today versus kind of the early days where Arc was one of the first movers?

Nick SmithChief Investment Officer

Of course. There certainly is more competition. That being said, capacity has returned to the market as sort of agency stuff has run off or refis have runoff, and we still see plenty of opportunity to buy these assets and others at attractive levels. And we don’t see that changing in the near future.

Doug HarterCredit Suisse — Analyst

Got it. And then could you just compare the relative attractiveness of returns of kind of non-QM versus nonowner-occupied loans and kind of which is a more attractive opportunity today?

Nick SmithChief Investment Officer

We see them fairly comparable. If anything, in the non-QM side, a lot of those positions are investor properties already and they’re fairly similarly priced. On the agency side, we just — it’s one of those things where we expect that to be opportunistic and to be sort of interesting opportunity for the coming years, and we expect pricing to come in and out, and we’ll obviously keep the relative value between the two products in mind.

Doug HarterCredit Suisse — Analyst

Got it. And then just one kind of accounting question. You mentioned that there was the negative MSR mark at Arc Homes. What was the size of that? And I guess how would the profitability of Arc have looked if you excluded the net MSR mark?

Anthony RossielloChief Financial Officer

The net MSR mark was down about 4 million for the quarter. So if you think about pulling that out from earnings, you’d probably be around plus 2 million — 2 to 3 million during the quarter without the MSR markdown.

Doug HarterCredit Suisse — Analyst

Great. And then so even if you stripped out the 1.4 million of gains, I guess, the contribution to you would be, I guess, closer to slightly positive to closer to breakeven versus the two point — or versus the loss you mentioned?

Anthony RossielloChief Financial Officer

That’s correct. One clarification of the mark-to-market loss that I mentioned was pre our 45% share. So that $4 million, we would only get 45% of that.

Doug HarterCredit Suisse — Analyst

OK. That makes sense. Thank you very much.

Operator

Next question comes from Bose George from KBW.

Bose GeorgeKBW — Analyst

Good morning. Actually, just first, just a clarification. You mentioned that the mid-quarter earnings doesn’t include the sales of the Arc Homes to MITT. Can you just remind me what from Arc is included in the core earnings?

Anthony RossielloChief Financial Officer

Their operating business, which is their gain on sale on the agencies and the non-QM that are not sold to us are included in core.

Bose GeorgeKBW — Analyst

And is there — like, in terms of what you buy from them, is that percentage going to remain stable because it seems like if it increases, you almost kind of hurt your core income, right, because it won’t count?

Anthony RossielloChief Financial Officer

Yeah, that’s correct. It has remained stable. We have bought approximately 50% of the production from non-QM from them, but your thinking is correct.

Bose GeorgeKBW — Analyst

OK. Great. And then if you just — sort of looking forward, I guess what are kind of the things that need to happen to get to a more whatever normalized core number? I mean, obviously, from an economic return, your returns are good, but I feel like a lot of people focus on core. So just what’s the best way to kind of think about that?

David RobertsChairman and Chief Executive Officer

This is David Robert answering that. I think the best way to think about this is that this quarter, and in all likelihood, the next few quarters, we’re in a transition to the new business model or to the go forward, I should say, business model. So it’s a mix of the two. We’ve got legacy assets that we’re rotating into first cash and then into our origination securitization business, and that’s going to take some time.

Bose GeorgeKBW — Analyst

OK. That makes sense. Great. Thanks.

Operator

Our next question comes from Trevor Cranston from JMP Securities.

Trevor CranstonJMP Securities — Analyst

Hey. Thanks, good morning. I wanted to clarify something on the commercial loans, and thanks for all the additional detail on those. In the prepared comments, I think you made the comment that you were hopeful that there could be a payoff on those in the near term.

I just wanted to clarify, was that comment related to both of the loans? Or was that maybe more directed toward the construction loan in particular?

T.J. DurkinPresident

Yeah. I mean, I would say it’s more — it’s obviously, we’re working with the borrower on the maturity issue on that loan in particular. I think obviously on the other loan, we fully anticipate that coming out of the modification period, it will remain contractually current, and they could pursue other financing options at that point.

Trevor CranstonJMP Securities — Analyst

OK. And can you remind us when that period ends?

T.J. DurkinPresident

Yeah. It was a one-year modification from last September. So it will end this September.

Trevor CranstonJMP Securities — Analyst

OK, got it. And then, on the GSE non-owner — GSE-eligible non-owner-occupied loans, can you maybe talk about that opportunity a little bit more and help us think of kind of what the potential market size is there relative to the sort of more traditional non-QM opportunity?

Nick SmithChief Investment Officer

Yeah, certainly. So historically, the supply of — or origination of investor properties via the GSEs or Fannie and Freddie has ranged from approximately 75 to 95 billion a year. It’s not had — it doesn’t have nearly sort of the same sort of cyclical impacts. So if anything, if this refi comes off, essentially, you’re lowering your denominator of other nonowner acquired assets.

So as that denominator goes lower, that 7% cap that’s been instituted in the latest PSPA or amendment with Fannie and Freddie, the assumption is that that will sort of normalize and that excess will be higher. So if — obviously, if the number goes to 12%, you have to solve for that excess of 7%. That being said, even prior to this, a good portion of GSE loans actually best expect and offered attractive returns for investors like ourselves. And our expectation is as originators get more familiar with selling to the private markets away from Fannie and Freddie that this space could grow.

Now, exactly how much of sort of the overall market, we’ll ultimately see, there’s a lot of factors that go into it. But at least it’s a decent sized notional.

Trevor CranstonJMP Securities — Analyst

Got it. OK. That’s very helpful. And then last thing, I think you noted that you guys had a short TBA position in the second quarter.

Can you say how large that position is and if you’re still carrying that into the third quarter?

Anthony RossielloChief Financial Officer

The position size is 130 million notional on the TBA that went on at quarter-end.

Trevor CranstonJMP Securities — Analyst

All right. Thank you.

Operator

Our next question comes from Jason Stewart from JonesTrading.

Jason StewartJonesTrading — Analyst

Hey. Good morning. A couple of follow-ups. On commercial loan, is the mark at 6 30 at 86% of part reflective of the coupon or your confidence in the payoffs?

T.J. DurkinPresident

Well, the mark — we use third-party vendors to help us determine the mark. So it’s 86% of par, which is a $51 million notional.

Jason StewartJonesTrading — Analyst

So is your thinking updated that you’re going to get a full par payoff at September 30 when the modification period is over?

T.J. DurkinPresident

Well, no. At September 30, their coupon will turn back on. And I think we’ll see what pricing vendors, how they view this sort of modifications that are all starting to expire, if you will, right? We’re kind of getting to that point in the calendar from a year ago. So I don’t have any certainty into how they’ll look at that, but we would expect that based on our conversations that the loan will start cash paying come Q4.

Jason StewartJonesTrading — Analyst

OK. So not necessarily a payoff, but it will be turned back on. OK, got it. And then if you can update us on book value quarter to-date, if you don’t mind.

Anthony RossielloChief Financial Officer

Yeah. Book value quarter-to-date was up 3%, approximately, and that was primarily driven by some of the mark-to-market gains that we’ve been talking about in the resi and commercial portfolio, as well as some of the realized gains through the sales that we mentioned during the quarter.

David RobertsChairman and Chief Executive Officer

Was your — I’m sorry, was your question about this third quarter that we’re in now? Or was it looking back to the third quarter?

Jason StewartJonesTrading — Analyst

Yeah, David, to the latest point available.

David RobertsChairman and Chief Executive Officer

Yeah, we’re not — we’re just going to stick with what we’ve reported.

Jason StewartJonesTrading — Analyst

OK. And then on the Arc MSR, when we look at that portfolio, can you give us any detail in terms of what SATO looks like or maybe like what a plus 50 or 100 move in the rates market looks like for the valuation of that MSR?

T.J. DurkinPresident

Well, just to be clear, so we sold the third-party purchased MSR. So the volatility going forward will be lower. And I would say we’re not, at this point, really reporting like SATO or shifts. The goal is really to reduce that volatility in that business and really have them focused on the origination side.

Jason StewartJonesTrading — Analyst

OK. OK. Last one for me then. I guess I understand sort of the rationale for the TBA sort of given valuations in the space, but how does that fit into the overall hedging strategy? And what’s your propensity to carry that position going forward?

Nick SmithChief Investment Officer

This is Nick. So part of the TBA short is the contemplation that we’ll be selling debt off of the recently acquired GSE positions. And when you think about when you sell that debt, it’s benchmarked versus TBA. So when you actually go sell that debt to third parties in the market, your benchmark is TBA because you’re selling loans backed by agency collateral.

So it’s really just a hedge similar to other hedges we put on against non-QM loans.

T.J. DurkinPresident

So Jason, yeah, I mean basically the pricing convention for traditional non-QM debt is off of swaps. And then for AAA seniors on the agency-eligible, it will be benchmarked off TBAs.

Jason StewartJonesTrading — Analyst

OK. Thanks for taking the questions. Appreciate it.

Operator

Our next question comes from Eric Hagen from BTIG.

Eric HagenBTIG — Analyst

Thanks. Good morning. Hope you guys are well. Within the debt and equity of affiliates, can you give a snapshot of what the balance sheet looks like there, including the amount of capital that’s sitting at Arc Home?

Anthony RossielloChief Financial Officer

Sure. In that line item, Arc Home is approximately $51 million of equity in that balance and then we also have approximately $30 million investment in a joint venture where we historically acquired non-QM. If you recall, we’re now acquiring the non-QM directly into the REIT. And then the other asset in there is approximately $80 million of the land-related financing that T.J.

mentioned earlier.

Eric HagenBTIG — Analyst

Got it. OK. That’s helpful. And then on the non-QM securitizations, how much leverage are you guys applying to the retained tranches to get to the return profile that you outlined in the deck?

Nick SmithChief Investment Officer

Somewhere between one and a half to two and a half turns.

Eric HagenBTIG — Analyst

OK. And are those mark-to-market, refill?

Nick SmithChief Investment Officer

Correct.

Eric HagenBTIG — Analyst

Right. All right. Thank you.

Operator

Our next question comes from Jim DeLisle from Seven Canyon [ph].

Unknown speaker

Good morning, folks. The MSI, I’m presuming that Arc continues to carry some MSR on its self-generated portfolio.

Anthony RossielloChief Financial Officer

Yeah, that’s correct.

Unknown speaker

And that would be in the $50 million or so line item you just referenced to Eric Hagen.

Anthony RossielloChief Financial Officer

It’s embedded within — the way that we account for it is we bring — we show the net equity that we own of Arc, we don’t look through into Arc Home’s balance sheet within our financials, but the asset would be flowing up into that net equity.

Unknown speaker

Right. Can you give us some understanding as to what percentage of that $50 million carrying value of your holding of Arc is represented by the MSR of their self-generated portfolio?

T.J. DurkinPresident

Jim, we don’t have that number in front of us, but we can look into that.

Unknown speaker

Great. Thank you very much. That’s my only question.

Operator

We have no further questions at this time. I’ll now turn the call over to our host for closing remarks.

Jenny NeslinGeneral Counsel and Secretary

Thank you, Sylvia. And thank you for — to everyone for joining the call today. Enjoy the rest of your weekend.

Operator

[Operator signoff]

Duration: 35 minutes

Call participants:

Jenny NeslinGeneral Counsel and Secretary

David RobertsChairman and Chief Executive Officer

T.J. DurkinPresident

Nick SmithChief Investment Officer

Anthony RossielloChief Financial Officer

Doug HarterCredit Suisse — Analyst

Bose GeorgeKBW — Analyst

Trevor CranstonJMP Securities — Analyst

Jason StewartJonesTrading — Analyst

Eric HagenBTIG — Analyst

Unknown speaker

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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What is Causing Bitcoin’s Price to Plunge?

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The cryptocurrency industry’s inaugural asset is experiencing one of the biggest downturns in its short history. Bitcoin has recently fallen to its lowest value in the last year-and-a-half. Having peaked at a value of $70,000 per Bitcoin in November 2021, almost $50,000 has been shaved off its value per Bitcoin in the last seven months. As of 15th June 2022, it has been trading at around $21,400 per Bitcoin. What’s happening and why is the Bitcoin crash causing a ripple effect throughout the rest of the crypto scene?

Crypto analysts believe the real-world problems of surging inflation and rising interest rates are having a knock-on effect on crypto values. With stock markets also threatening to enter a bear market, it’s possible that a big reason for the plunge in Bitcoin is that many investors in BTC have chosen to liquidate their positions and stockpile as much cash as possible as a safety net. Despite the difficult backdrop for Bitcoin right now, it’s still an asset that retailers are keen to accept and utilize as part of their cash flow.

In Canada, there are still plenty of businesses and merchants that accept Bitcoin and other cryptocurrencies as legitimate forms of payment. For example, in the newly regulated Canadian iGaming market, brands like Bodog make it possible for Bitcoin holders to play casino slots for real money, with deposits permitted in Bitcoin, Bitcoin Cash, Bitcoin SV, Litecoin, Ethereum, and USD Tether. Major Canadian gift card brands like Coincards and CoinGate also permit Bitcoin transactions in exchange for gift cards with the biggest names in retail and e-commerce, namely Amazon and Walmart.

In addition, online travel agents like Travala still accept Bitcoin, with discounts worth up to 40% available to those booking flights and trips with cryptocurrency.

Other crucial developments affecting Bitcoin

In recent days, two of the most prominent names in cryptocurrency trading and investing have experienced severe issues. Binance, the world’s most liquid cryptocurrency exchange, was forced to cease Bitcoin transactions for several hours. The platform attributed this hold-up to a “stuck transaction”, although many have since looked upon this excuse with skepticism.

Additionally, the collapse of decentralized finance (DeFi) platform Celsius has been a dagger in the heart of many in crypto circles. The “extreme market conditions” have raised serious question marks over Celsius’ long-term future, with its liquidity drying up fast. The firm takes cryptocurrency in exchange for annual yields on investor deposits, but if there’s no yield to back this up, the concept folds like a pack of cards.

Is it possible to anticipate a recovery for Bitcoin and crypto?

In truth, Bitcoin and all other cryptocurrencies are entering unchartered territory at present. Consumer and retail investor behaviours are changing as confidence in real-world economies diminish by the day. Analysts insist that extreme caution must be taken to enter the markets right now. With very little historical data to fall back on, the price of Bitcoin remains volatile.

Although there is a general feeling within the cryptocurrency community that a “pump” will return sooner or later, it’s going to take time for demand to outstrip supply once more.

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Rothschilds hires RBC's Graham to run Canadian investment bank – The Globe and Mail

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Rothschild & Co is scaling up its Canadian business, hiring veteran Royal Bank of Canada dealmaker Alex Graham to lead domestic expansion at a global investment bank with a two-century family pedigree.

On Monday, Paris-based Rothschild will announce that Mr. Graham will be its Toronto-based managing director and head of Canada, with a mandate to move beyond the bank’s current focus on advisory work for the mining industry and restructurings. For the past decade, Mr. Graham was head of RBC’s telecom, media and technology group in Canada, then Europe.

“Alex has strong professional roots in Canada and a global network of relationships,” Jimmy Neissa, head of Rothschild, North America, said in a release. “His experience, knowledge and leadership will serve our clients well and further grow our leading franchise in the region.”

Mr. Neissa joined Rothschild in 2016 with a mandate to build its North American operations after spending two decades as New York-based merger and acquisition (M&A) specialist at UBS and Donaldson, Lufkin & Jenrette, where Mr. Graham also worked. Previously, Mr. Graham also led the diversified industries team for Morgan Stanley in Canada and worked for Citigroup in New York.

Last year, Rothschild ranked sixth among investment banks for M&A in Europe, advising on 464 transaction, and was 15th among North American banks on M&A, working on 220 deals, according to data service Refinitiv. Rival European banks with significant North American operations include Barclays, while Deutsche Bank, Credit Suisse and UBS have scaled back in the region in recent years.

Rothschild is building out its Canadian team at a time when large Canadian companies and fund managers such as pension plans and Brookfield Asset Management Inc. are using international M&A to build their businesses. The investment bank currently has 10 professionals in Canada.

Rothschild plans to hire Canadian financiers with expertise in M&A for banks and financial services businesses, technology, infrastructure and power companies, and link these local bankers with its international expertise, Mr. Graham said.

“With Rothschild’s strong momentum in North America, along with its continued strength and deep bench of expertise in M&A advisory around the world, I’m honored to have the opportunity to lead and continue to grow the business in Canada,” he said in a release.

Prior to becoming an investment banker, Mr. Graham worked in Ottawa as an adviser to Prime Minister John Turner. He holds an MBA from Western University’s Richard Ivey School of Business and an undergraduate degree from Trinity College at the University of Toronto.

Rothschild has deep roots in Canada, serving as the financier that backed development of the massive Churchill Falls power project in Labrador in the 1960s. More recently, former securities lawyers Gar Emerson and Montreal-based investment banker Daniel Labrecque served as country head in Canada.

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1PointFive and Manulife Investment Management announce lease agreement for a carbon capture and sequestration project in Louisiana – GlobeNewswire

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HOUSTON, June 27, 2022 (GLOBE NEWSWIRE) — 1PointFive, a subsidiary of Occidental’s (NYSE: OXY) Low Carbon Ventures (OLCV) business, and Manulife Investment Management today announced that OLCV and Manulife entered into a lease agreement for approximately 27,000 acres of timberland in Western Louisiana. The agreement provides 1PointFive with access to subsurface pore space and surface rights to develop and operate a carbon sequestration hub, with access to permanently store industrial carbon emissions. Two Class VI injection permits, required by the EPA for geologic sequestration, have already been filed for the site.

The lease agreement is a pivotal step in 1PointFive’s strategic vision to develop carbon capture and sequestration hubs, some of which are expected to be anchored by Direct Air Capture (DAC) facilities.

Manulife Investment Management’s acreage offers excellent storage capacity within proximity to point source industrial emitters, who would otherwise emit carbon dioxide to the atmosphere. 1PointFive would also like to recognize New Dawn Energy, which is a Manulife land lease partner, and has been cooperative and supportive of the project.

“We are excited to join with Manulife and lease the acreage to develop a hub that will provide sequestration infrastructure and services for industrial emitters and 1PointFive’s future DAC facilities,” said Dr. Doug Conquest, Vice President, OLCV. “This agreement strengthens our CCUS position and advances commercial-scale decarbonization solutions in line with Oxy’s net-zero goals.”

“We understand the importance our forests and underlying land play as a natural climate solution in decarbonization,” said Eduardo Hernandez, Managing Director and Global Head of Timberland Operations at Manulife Investment Management. “We focus on sustainably managing our forests for climate-positive and nature-positive impact, and we are excited to find additional opportunities to continue this work for clients.”

1PointFive and Manulife Investment Management are also exploring other locations and projects throughout the region and country with the potential to add additional acreage for carbon removal and sequestration. 1PointFive adheres to U.S. Environmental Protection Agency (EPA) standards for monitoring, reporting and verifying (MRV) the amount, safety and permanence of CO2 stored through secure geologic sequestration. The company and its affiliates hold three EPA-approved MRV plans for geologic sequestration. 1PointFive will apply this expertise toward the safe design and operation of the project.

Manulife Investment Management manages approximately 6 million acres of timberland across the United States, Canada, New Zealand, Australia, Brazil, and Chile. It also oversees approximately 400,000 acres of prime farmland in major agricultural regions of the United States and in Canada, Chile, and Australia.

About 1PointFive
1PointFive is a Carbon Capture, Utilization and Sequestration (CCUS) platform that is working to help curb global temperature rise to 1.5°C by 2050 through the deployment of decarbonization solutions, including Carbon Engineering’s Direct Air Capture (DAC) and AIR-TO-FUELS™ technologies alongside geologic sequestration hubs. More at 1PointFive.com.

About Oxy Low Carbon Ventures (OLCV)
Oxy Low Carbon Ventures, LLC (OLCV) is a subsidiary of Occidental (Oxy), an international energy company with assets primarily in the United States, the Middle East and North Africa. OLCV is focused on advancing cutting-edge, low-carbon technologies and business solutions that enhance Oxy’s business while reducing emissions. OLCV also invests in the development of low-carbon fuels and products, as well as sequestration services to support carbon capture projects globally. Visit Carbon Innovation on oxy.com for more information.

About Manulife Investment Management 
Manulife Investment Management is the global brand for the global wealth and asset management segment of Manulife Financial Corporation. We draw on more than a century of financial stewardship and the full resources of our parent company to serve individuals, institutions, and retirement plan members worldwide. Headquartered in Toronto, our leading capabilities in public and private markets are strengthened by an investment footprint that spans 19 geographies. We complement these capabilities by providing access to a network of unaffiliated asset managers from around the world. We’re committed to investing responsibly across our businesses. We develop innovative global frameworks for sustainable investing, collaboratively engage with companies in our securities portfolios, and maintain a high standard of stewardship where we own and operate assets, and we believe in supporting financial well-being through our workplace retirement plans. Today, plan sponsors around the world rely on our retirement plan administration and investment expertise to help their employees plan for, save for, and live a better retirement. Not all offerings are available in all jurisdictions. For additional information, please visit manulifeim.com.

Forward-Looking Statements
This news release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including those relating to OLCV’s strategy, 1PointFive’s strategy’s impact on the environment, the agreement’s benefits and related impact on carbon emissions, and 1PointFive’s plans to build, acquire and operate multiple sequestration hubs as part of Oxy’s net-zero strategy. These statements are based on Oxy’s current expectations, beliefs, plans, estimates, and forecasts. All statements other than statements of historical fact are forward-looking statements for purposes of federal and state securities laws. Words such as “will,” “may,” “expect,” “plan,” or similar expressions that convey the prospective nature of events or outcomes are generally indicative of forward-looking statements. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this news release. Unless legally required, Oxy does not undertake any obligation to update, modify, or withdraw any forward-looking statements as a result of new information, future events, or otherwise.

These statements are not guarantees of future performance as they involve assumptions that may prove to be incorrect and risks and uncertainties, including those that are beyond Oxy’s control. Factors that may cause actual results to differ materially from forward-looking statements include Oxy’s, OLCV’s and 1PointFive’s ability to access necessary technology, to develop and employ existing or new technology on a commercial scale, to acquire requisite pore space, to access capital, to collaborate with third parties and customers, and to receive approvals from regulatory bodies, as well as market conditions, geopolitical events, and scientific developments. Additional factors that may affect 1PointFive’s ability to build, acquire and operate multiple sequestration hubs can be found in Oxy’s public disclosure and its filings with the U.S. Securities and Exchange Commission (SEC), which may be accessed at Oxy’s website at oxy.com or the SEC’s website at sec.gov. Information included herein is not necessarily material to an investor in Oxy’s securities.

1PointFive media relations contact
Eric Moses
Phone: +1 (713) 497-2017
Email: eric_moses@oxy.com

1PointFive investor relations contact
Jeff Alvarez
Phone: +1 (713) 215-7864
Email: jeff_alvarez@oxy.com

Manulife Investment Management media relations contact
Elizabeth Bartlett
Email: Elizabeth_Bartlett@manulife.com

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