Question-and-Answer Session
Operator
(Operator Instructions). Our first question comes from the line of Bose George - KBW.
Bose George - KBW
We had a question on the increase in your adjusted book value over the last quarter. Can you just walk through the changes in your adjusted book value between 3Q and 4Q? And also on a related note, are you planning to adopt FAS 159 in the first quarter?
Debra Hess
To answer your first question, the increase in the adjusted book value is primarily related to our CDL liabilities, which was $12.15. We are not anticipating adopting 159 through the GAAP due to the volatility of our income statement but our goal is to report our adjusted book value as if we did. So you’d get to the same place.
Bose George - KBW
Great, thanks a lot.
Operator
Our next question comes from the line of Don Fandetti - Citigroup.
Don Fandetti - Citigroup
Wes, I wanted to know if you have any cash flow triggers on any of your securitizations that could be a risk to your cash flow?
Wesley Edens
There are credit tests on each of the CBOs. None of them are market triggers so it’s not a matter of being forced to liquidate any of the positions. The nature of the financing we put in place is quite stable and given times like this, you can see the benefit of doing so.
There are no triggers in any of the individual transactions that are currently been triggered or are on the verge of being triggered. Obviously future performances will dictate how that all turns out, but for the immediate term we don’t see any issues there.
Don Fandetti - Citigroup
And do you have those triggers on your sub-prime securitizations?
Wesley Edens
No.
Kenneth Riis
No.
Don Fandetti - Citigroup
Okay. And then obviously, you sold some of your agency assets. Does that somehow impact your exemption from the ?40 Act or are you comfortable? And how are you making up for that?
Debra Hess
We are passing the test.
Don Fandetti - Citigroup
Okay, you are passing the test?
Debra Hess
We have no issues.
Wesley Edens
Yes, we’re comfortable with that.
Don Fandetti - Citigroup
Okay. And then this question is for Wes. There’s a lot of concern in the marketplace about commercial real estate and where it’s headed with CMBS spreads being very wide. What is your take? Could you handicap where the market might be going over the next six to twelve months?
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