UPDATE: Oppenheimer Initiates Zais Financial at Perform; Waiting for Portfolio Execution

Oppenheimer initiated coverage on Zais Financial

with a Perform rating. Oppenheimer noted, "Longer-term market opportunities exist for mortgage real estate investment trusts (MREITS) to provide private capital for the mortgage finance industry as the GSEs reduce the size of their portfolios and as regulatory changes continue to reshape the industry. Zais Financial is a hybrid MREIT with plans to allocate 50-60% of its capital into whole loans. Despite our upbeat assessment of the investment opportunities for hybrid MREITS, we believe a Perform rating is appropriate for Zais Financial. Zais has yet to acquire whole loans, to our knowledge, and we want to see multiple quarters of consistent-to-increasing dividends before reassessing our view." Zais Financial closed at $19.95 on Monday.