LONDON (ShareCast) - US mortgage-backed bond investor Prodesse upped its fourth quarter dividend by 30% as it shrugged off the turbulent conditions in the US housing market.

"'We are pleased that during the fourth quarter Prodesse was able to increase the dividend per hare by over 30% despite the volatile and uncertain conditions in global financial markets," chief executive Michael Farrell said.

"We believe that the continued vigilance of the Federal Reserve will not only serve to calm the markets but it should also help to continue to reduce our cost of funds. In these conditions, Prodesse is poised to continue to perform," he added.

In sterling terms, the dividend for the final quarter rises from 8p to 11p to make a total for 2007 of 34p. Net asset per share at they year end totalled 388p down from 413p at the end of 2006.

At the end of 2007 all of the assets in the the portfolio were Fannie Mae, Freddie Mac and Ginnie Mae mortgage-backed securities, which carry an implied 'AAA' rating, Prodesse said.

All other things being equal, recent rate cuts by the US Federal Reserve will have the effect of further lowering Prodesse's cost of funds relative to the yield on its portfolio, it added.

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