UPDATE 1-Alesco says IndyMac failure hurt its portfolio
(Adds details about CDOs)
NEW YORK, July 15 (Reuters) - Alesco Financial Inc AFN.N, a real estate investment trust, said on Tuesday the failure of IndyMac Bancorp Inc IMB.N had "significantly impacted" its portfolio, but its strong liquidity would enable it to "manage through these difficult times."
U.S. banking regulators swooped in to seize mortgage lender IndyMac on Friday after withdrawals by panicked depositors led to the third-largest banking failure in U.S. history.
The shares of Philadelphia-based Alesco, which holds some IndyMac preferred securities through collateralized debt obligations (CDOs), tumbled 27 percent on Monday.
Alesco said on Tuesday it expected the seizure of IndyMac would cause it to record a realized tax loss of about $86 million. That will significantly offset its expected taxable income for the year ending Dec. 31, it said.
It said that, as of June 30, it had six CDOs in over- collateralization. It expects three of these to recommence making equity distributions within 3 to 6 quarters and the other three to do so within 20 to 35 quarters.
The trigger of an over-collateralization test in a CDO means that Alesco will no longer receive current distributions of cash in respect of its equity interests until sufficient cash flow is generated.
The company said it was evaluating its overall portfolio for changes in fair value. It expects to report second-quarter earnings on Aug. 5. (Reporting by Megan Davies; Editing by Gary Hill and Andre Grenon)
