Invesco Mortgage Capital: A Buying Opportunity Emerges In The Series C Preferred Shares

Ivo Kolchev1.62K FollowersFollow5ShareSavePlay(9min)Comments(2)SummaryInvesco Mortgage Capital's (IVR) Series C 7.5% fixed-to-floating preferreds (IVR.PR.C) have slipped in recent weeks after trading close to book value earlier in the year.This comes as market pricing for Fed rate cuts shifts from 2026 to 2027, presenting a near-term headwind for fixed-rate preferred shares.The Series C preferred shares only convert to a floating rate in Q4 2027, allowing them to deliver capital gains should the Fed finalize its policy normalization next year.Even if the Fed cuts interest rates by 0.50% next year, preferred dividends will increase from 7.5% to around 8.55%.IVR's high leverage, the inherent uncertainty in future Fed policy, and an increase in long term interest rates are key risks to consider. ArLawKa AungTun/iStock via Getty Images Introduction Fixed-rate preferred shares have come under pressure in recent weeks as Fed rate cut expectations shift from 2026 to 2027 amid energy price volatility. While this has resulted in some near-term losses for investors, itThis article was written byIvo Kolchev1.62K FollowersFollowI ventured into investing in high school in 2011, mainly in REITs, preferred stocks, and high-yield bonds, starting a fascination with markets and the economy that has not faded despite the years. More recently I have been combining long stock positions with covered calls and cash secured puts. I approach investing purely from a fundamental long-term point of view.

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