FBR Capital on Apollo Commercial Real Estate (ARI): Capital Put To Work In Unique Structured Transaction

FBR Capital on Apollo Commercial Real Estate (NYSE: ARI): Capital Put To Work In Unique Structured Transaction

"Our two cents: On ARI's 4Q'10 conference call, management noted the company had several transactions in the works, specifically two deals totaling $75M at mid-teens returns that were expected to close near the end of 1Q11. This is clearly one of them. We believe that this structured transaction, as well as ARI's ability to underwrite the CDO, speaks to the company's potential diversity in terms of future opportunities."

"We believe that shares trading at a discount to last reported book value of $16.97 and a 9.8% dividend yield are attractive at current levels."

FBR maintains an 'Outperform' rating on ARI.

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