The Board of Directors of Luminent Mortgage Capital, Inc. (NYSE: LUM) today declared a cash dividend for the fourth quarter of 2005 of $0.03 per share. The annualized dividend yield for the quarter, based on the December 19, 2005 closing stock price of $7.48, was 1.6%. This dividend is payable on January 31, 2006 to stockholders of record at the close of business on December 30, 2005.
"This quarter, Luminent's dividend was again pressured by Federal Reserve interest rate hikes, which directly increase our cost of funds," said Gail P. Seneca, Chairman and Chief Executive Officer. "Since June 2004, the Federal Reserve has increased rates thirteen times, pushing the Federal Reserve rate up by 3.25%. The asset yields on Luminent's high quality portfolio haven't risen nearly as quickly in this short time period. The resulting spread compression has caused us to reduce our current dividend. Luminent investors should expect much greater stability in our dividend when the Federal Reserve tightening cycle ends."
"Luminent continues to ramp up its business diversification strategies in residential mortgage loans and non-AAA rated mortgage bonds," said Trez Moore, President and Chief Operating Officer of Luminent. "Over time, we anticipate that these strategies will reduce Luminent's sensitivity to interest rates and increase our ability to deliver stable investment returns. The operating results in our credit sensitive business to date are compelling. Despite ongoing dividend pressure, Luminent's long term value proposition is sound."
Luminent was formed in April 2003, completed its initial public offering in December 2003 and trades on the New York Stock Exchange under the ticker "LUM." Luminent is organized and conducts its operations so as to qualify as a real estate investment trust for federal income tax purposes. Luminent's principal activity is to invest in mortgage-backed securities and loans, thereby providing capital to the single family residential housing market. Luminent's website can be found at http://www.luminentcapital.com.
This news release and Luminent's filings with the Securities and Exchange Commission contain forward-looking statements that predict or describe future events or trends. The matters described in these forward-looking statements are subject to known and unknown risks, uncertainties and other unpredictable factors, many of which are beyond Luminent's control and are based on the information currently available to Luminent's management. Luminent faces many risks that could cause its actual performance to differ materially from the results expressed or implied by its forward-looking statements, including, without limitation, the possibilities that interest rates may change, that principal payment rates may change, that mortgage-backed securities or mortgage loans may not be available for purchase on favorable terms, that borrowings to finance the purchase of assets may not be available on favorable terms, that Luminent may not be able to maintain its dividend or the yield on its common stock, that Luminent may not be able to maintain its qualification as a REIT for federal income tax purposes, that Luminent may experience the risks associated with investing in real estate, including changes in business conditions and the general economy, that our recently adopted business strategy to purchase mortgage loans for securitization may not be successful, and that Luminent's strategies may not be effective (including portfolio management and hedging strategies and strategy to protect net interest spreads). Luminent's filings with the Securities and Exchange Commission contain a more complete description of these and many other risks to which Luminent is subject. Because of those risks, Luminent's actual results, performance or financial condition may differ materially from the results, performance or financial condition contemplated by its forward-looking statements. The information set forth in this news release represents management's current expectations and intentions. Luminent assumes no responsibility to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.
Contact:
Christopher J. Zyda
Senior Vice President &
Chief Financial Officer
Phone: 415-978-3000
Email: ir@luminentcapital.com

Source: prnewswire