SEC Comment Letter for Arlington Asset Investment Corp. (CIK 0001209028) — Aug 9, 2022
Arlington Asset Investment Corp. (CIK 0001209028)
Date: Aug. 9, 2022 · CIK: 0001209028 · Accession: 0000000000-22-008430
AI Filing Summary & Sentiment
File numbers found in text: 001-34374
Letter
United States securities and exchange commission logo August 9, 2022 Richard Konzmann Executive Vice President, Chief Financial Officer and Treasurer Arlington Asset Investment Corp. 6862 Elm Street, Suite 320 McLean, VA 22101 Re:Arlington Asset Investment Corp. Form 10-K for the year ended December 31, 2021 File No. 001-34374 Dear Richard Konzmann: We have reviewed your July 20, 2022 response to our comment letter and have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure. Please respond to these comments within ten business days by providing the requested information or advise us as soon as possible when you will respond. If you do not believe our comments apply to your facts and circumstances, please tell us why in your response. After reviewing your response to these comments, we may have additional comments. Unless we note otherwise, our references to prior comments are to comments in our June 21, 2022 letter. Form 10-K for the year ended December 31, 2021 Notes to Consolidated Financial Statements Note 7. Investments in MSR Financing Receivables, page F-12 1.We note your response to comment 5 and your statement that in reaching the conclusion that you should not consolidate the financial statements of Seneca, you determined that you should not record Seneca’s debt obtained from the third-party secured credit facility as a liability within your financial statements. In light of your requirement to provide Seneca with additional funds to meet a margin call and your exposure to the risk that Seneca defaults on its payment obligations, please tell us what consideration was given to recording the Seneca debt as a liability within your financial statements. Within your response, please reference the authoritative accounting literature management relied upon. 2.We note your response to comment 5, and it does not appear that you have addressed the fourth bullet point from our comment. We note that you have elected to allow the Seneca
FirstName LastNameRichard Konzmann Comapany NameArlington Asset Investment Corp. August 9, 2022 Page 2 FirstName LastName Richard Konzmann Arlington Asset Investment Corp. August 9, 2022 Page 2 to leverage the MSR financing receivables, and that as of December 31, 2021, Seneca had obtained approximately $40.4 million of financing secured by the MSRs to which the Company's MSR financing receivables are referenced. Please clarify how you have accounted for this transaction and reference the authoritative accounting literature management relied upon. You may contact Eric McPhee at 202-551-3693 or Jennifer Monick at 202-551-3295 if you have any questions. Sincerely, Division of Corporation Finance Office of Real Estate & Construction
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United States securities and exchange commission logo
August 9, 2022
Richard Konzmann
Executive Vice President, Chief Financial Officer and Treasurer
Arlington Asset Investment Corp.
6862 Elm Street, Suite 320
McLean, VA 22101
Re:Arlington Asset Investment Corp.
Form 10-K for the year ended December 31, 2021
File No. 001-34374
Dear Richard Konzmann:
We have reviewed your July 20, 2022 response to our comment letter and have the
following comments. In some of our comments, we may ask you to provide us with information
so we may better understand your disclosure.
Please respond to these comments within ten business days by providing the requested
information or advise us as soon as possible when you will respond. If you do not believe our
comments apply to your facts and circumstances, please tell us why in your response.
After reviewing your response to these comments, we may have additional
comments. Unless we note otherwise, our references to prior comments are to comments in our
June 21, 2022 letter.
Form 10-K for the year ended December 31, 2021
Notes to Consolidated Financial Statements
Note 7. Investments in MSR Financing Receivables, page F-12
1.We note your response to comment 5 and your statement that in reaching the conclusion
that you should not consolidate the financial statements of Seneca, you determined that
you should not record Seneca’s debt obtained from the third-party secured credit facility
as a liability within your financial statements. In light of your requirement to provide
Seneca with additional funds to meet a margin call and your exposure to the risk that
Seneca defaults on its payment obligations, please tell us what consideration was given to
recording the Seneca debt as a liability within your financial statements. Within your
response, please reference the authoritative accounting literature management relied upon.
2.We note your response to comment 5, and it does not appear that you have addressed the
fourth bullet point from our comment. We note that you have elected to allow the Seneca
FirstName LastNameRichard Konzmann
Comapany NameArlington Asset Investment Corp.
August 9, 2022 Page 2
FirstName LastName
Richard Konzmann
Arlington Asset Investment Corp.
August 9, 2022
Page 2
to leverage the MSR financing receivables, and that as of December 31, 2021, Seneca had
obtained approximately $40.4 million of financing secured by the MSRs to which the
Company's MSR financing receivables are referenced. Please clarify how you have
accounted for this transaction and reference the authoritative accounting literature
management relied upon.
You may contact Eric McPhee at 202-551-3693 or Jennifer Monick at 202-551-3295 if
you have any questions.
Sincerely,
Division of Corporation Finance
Office of Real Estate & Construction