UPDATE: Jefferies Downgrades Invesco Mortgage Capital to Hold

Jefferies & Company has published a research report on Invesco Mortgage Capital

and has downgraded the company from Buy to Hold after the company reported dividend cuts and portfolio weakness as of late. In the report, Jefferies writes, "We expect this weakness to continue in the current low rate environment as the company's interest rate derivatives book negatively impacts performance. Based on these factors, we are reducing our rating on shares of IVR from Buy to Hold. Overall performance in 3Q11 was lackluster as book value was down 15% Q/Q and IVR ran into issues with their hedge positions due to the massive rally in the rates markets in early August. It is now apparent that our expectation for a stable to higher 4Q11 dividend was misguided due to the fact that the 3Q11 dividend cut did not incorporate the full impact of the forced unwind of the Agency portfolio." Jefferies has also lowered the price target from $16.50 to $14 on Invesco Mortgage, which is currently trading up $0.19 from yesterday's $13.98 closing price.