UPDATE: Sterne Agee Downgrades CYS Investments to Underperform

Sterne Agee is out with its report today on CYS Investments CYS, downgrading CYS from Neutral to Underperform. In its report, Sterne Agee writes, "We are reducing our rating on CYS Investments from Neutral to Underperform on a combination of what we see as increased prepayment risk and a possible further reduction in the dividend on lower cash operating earnings. Yield spread is likely to continue to fall in the face of faster prepayments. Our price target of $11.50 is based on an 88% price to book multiple, in line with other agency peers, adjusted for the increased prepayment exposure." At the time of posting, shares of CYS were trading at $12.38, down 0.40% from Thursday's close.