Updated from 1:19 p.m. EDT
RAIT Financial Trust's(RAS Quote) exposure to the plummeting real estate market is not only tied to the foundering American Home Mortgage(AHM Quote), but it also includes investments in hybrid debt securities issued by two homebuilders facing liquidity worries -- Beazer Homes (BZH Quote) and WCI Communities(WCI Quote).
RAIT shares plunged 36% Tuesday after it disclosed that it has invested in trust preferred securities issued by American Home, which could file for bankruptcy. RAIT's shares were down another $1.49, or 14%, to $8.87 in recent trading.
Trust preferred securities are essentially a hybrid of debt and preferred stock. RAIT buys the paper and in turn places it into collateralized debt obligations. ...
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