UPDATE: JP Morgan Initiates Western Asset Mortgage Capital with Neutral, $19 PT

JP Morgan initiates its coverage on Western Asset Mortgage Capital

with a Neutral rating and a price target of $19. JP Morgan notes, "WMC is a newly established mortgage REIT (May 2012) that invests in agency mortgage-backed securities. The company was funded in a “blind-pool” IPO and is externally managed by Western Asset Mgmt Co. (WAMCO), an established fixed income asset manager. WMC is currently constructing a portfolio of agency MBS funded by a combination of debt and equity. The level of leverage employed will vary based on the volatility and underlying credit of the MBS being financed. We expect the agency RMBS portfolio to be levered 6-8x. We believe the current price fairly reflects execution risks associated with a “blind-pool” IPO." WMC closed at $18.52 on Friday.