Alesco Financial buys back more than 56% of 7.625% convertibles

By Angela McDaniels

Tacoma, Wash., Sept. 11 - Alesco Financial Inc. said it bought back $78.8 million of its 7.625% contingent convertible senior notes due 2027 for $33 million in cash.

The repurchases were made in the open market and in privately negotiated transactions, according to a company news release.

The buybacks generated $45.8 million in book gains, which are expected to be recorded in the third quarter.

The company also announced that it will suspend its dividend for the third quarter. Tax losses incurred in the year to date are expected to eliminate taxable income for 2008, including the $45.8 million of gains noted above.

"As of June 30, available unrestricted cash was approximately $120 million, or nearly $90 million after completing the debt buy back," president and chief executive officer James McEntee said in the release. "We believe we remain positioned to capitalize on distressed pricing of certain assets in the marketplace, which may include our own securities."

Alesco is a specialty finance real estate investment trust based in Philadelphia.

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