Business Context and Reporting Period
Cohen & Steers, Inc. filed this Form 8-K on September 8, 2008, to report a material event triggered by government actions taken on September 7, 2008, regarding Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac).
Key Financial Metrics
- Impairment Charge: Approximately $10 million recorded as an other-than-temporary impairment.
- Investment Cost Basis: Approximately $11 million for perpetual preferred securities in Fannie Mae and Freddie Mac.
- Asset Classification: Investments are classified as available-for-sale and carried at fair value.
- Liquidity Impact: Management states the charge will not have a material effect on the Company's financial position or liquidity.
Material Changes
The filing discloses a specific impairment charge resulting from the U.S. Treasury Department and Federal Housing Finance Agency's intervention with Fannie Mae and Freddie Mac. This represents a reduction in the fair value of the Company's specific holdings in these entities.
Management Commentary and Risks
Management asserts that the impairment charge is isolated to the specific perpetual preferred securities held, noting the Company does not own any other Fannie Mae or Freddie Mac securities. The filing explicitly states that the event is not expected to materially impact the Company's overall financial position or liquidity.
Investor Verification Points
- Confirm the exact timing of the impairment recognition relative to the September 7, 2008 government actions.
- Verify the total exposure to Fannie Mae and Freddie Mac securities to ensure no other holdings exist outside the disclosed $11 million cost basis.
- Review subsequent quarterly reports to assess the actual impact on net income and equity following this charge.