Dynex Capital, Inc. announced today its will refinance approximately $74.2 million in collateralized financings with repurchase agreement financing in order to take advantage of the lower interest rate environment and reduce its overall borrowing costs.
Approximately $23.7 million in the collateralized financings is a securitization financing bond issued by the company in 1998 and which finances commercial mortgage loans included in the Company's financial statements. The bond has recently been upgraded to double-A from single-A plus, reflecting the high quality of the associated loan collateral.
Dynex also announced that it plans to settle all claims asserted against all defendants of the class action lawsuit filed against the company by the Teamsters Local 445 Freight Division Pension Fund in February 2005.
The lawsuit alleged violations of the federal securities laws on behalf of a class of purchasers of MERIT Series 12-1 and MERIT Series 13 securitization financing bonds between February 2000 and May 2004.
Under the terms of a proposed settlement, the company will pay $7.5 million into an escrow account.
The Company continues to deny that it violated any federal securities laws and has agreed in principle to this settlement solely to eliminate the expense, burden and uncertainty of the litigation.
"This settlement will resolve legacy litigation so that we may continue to focus on the long-term future of our business," said Thomas Akin, chairman and CEO. "It will settle a significant uncertainty and does not materially impact the core operating or future earnings potential of the company."