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Organization and Operations (Notes)
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9 Months Ended |
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Sep. 30, 2012
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| Organization and Operations [Abstract] | |
| Organization and Operations |
Organization and Operations
Two Harbors Investment Corp., or the Company, is a Maryland corporation focused on investing in, financing and managing residential mortgage-backed securities, or RMBS, residential mortgage loans, residential real properties, and other financial assets. The Company is externally managed and advised by PRCM Advisers LLC, a subsidiary of Pine River Capital Management L.P., or Pine River, a global multi-strategy asset management firm. The Company's common stock is listed on the NYSE and its warrants are listed on the NYSE MKT under the symbols “TWO” and “TWO.WS,” respectively.
The Company has elected to be treated as a real estate investment trust, or REIT, for U.S. federal income tax purposes commencing with its initial taxable period ended December 31, 2009. As long as the Company continues to comply with a number of requirements under federal tax law and maintains its qualification as a REIT, the Company generally will not be subject to U.S. federal income taxes to the extent that the Company distributes its taxable income to its stockholders on an annual basis and does not engage in prohibited transactions. However, certain activities that the Company may perform may cause it to earn income which will not be qualifying income for REIT purposes. The Company has designated certain of its subsidiaries as taxable REIT subsidiaries, or TRSs, as defined in the Code, to engage in such activities, and the Company may in the future form additional TRSs.
On September 11, 2012, the Company announced the proposed contribution of its portfolio of single-family rental properties to a newly formed entity intended to qualify as a REIT. Specifically, the Company would contribute its equity interests in its wholly owned subsidiary, Two Harbors Property Investment LLC to Silver Bay Realty Trust Corp., a newly organized Maryland corporation focused on the acquisition, renovation, leasing and management of single-family residential properties for rental income and long-term capital appreciation. In exchange for its contribution, the Company would receive shares of common stock of Silver Bay. Silver Bay Realty Trust Corp. has filed a registration statement with the U.S. Securities and Exchange Commission with respect to the proposed initial public offering, or IPO, of its common stock. The consummation of the proposed contribution transaction, which remains subject to approval of the Company's board of directors, is dependent upon the value of the contribution and amount of capital raised in the proposed IPO as well as market and other conditions.
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