Annaly Capital Management Inc

Annaly Capital Management is a U.S.-based mortgage REIT that invests primarily in residential mortgage assets and related financing structures. Its business model is to earn spread income from mortgage loans and mortgage-backed securities while actively managing interest-rate and prepayment risk through repurchase agreements, securitizations, and derivatives. The company also operates through taxable REIT subsidiaries and a broker-dealer subsidiary, which support its investment and financing activities. Because it is structured as a REIT, Annaly is designed to distribute taxable income to shareholders rather than retain earnings like an operating company.

— Annaly Capital Management Inc
%
Residential mortgage assets55% Agency and non-agency residential mortgage loans and mortgage-backed securities that generate coupon income and portfolio spread.
Mortgage servicing and related income15% Net servicing income and related cash flows tied to mortgage servicing and portfolio management activities.
Financing and securitization15% Repurchase agreements, securitized debt, and other funding structures used to finance mortgage assets.
Derivative hedging10% Interest-rate swaps and other hedges used to manage duration, funding, and rate exposure.
Capital markets and fee-related activities5% At-the-market equity issuance and other capital markets activities that support balance sheet growth and liquidity.

Annaly does not sell to traditional end customers in the way an operating company does; instead, its economic...

  • Residential housing finance marketprimary

    Annaly invests in mortgage loans and securities backed by U.S. residential housing, so its core economic exposure comes from homeowners and the mortgage market rather than direct retail customers.

  • Capital markets investorsprimary

    Public equity investors provide growth capital through common stock issuance, including the at-the-market program used to fund portfolio expansion and liquidity.

  • Repo and financing counterpartiesprimary

    Banks and broker-dealers provide short-term secured financing that is essential to funding mortgage assets and managing leverage.

  • Mortgage servicing ecosystemsecondary

    Servicing counterparties and mortgage servicing assets generate net servicing income and related cash flows that diversify earnings.

  • Derivative counterpartiessecondary

    Swap dealers and other financial institutions provide hedging instruments used to manage interest-rate exposure and funding costs.

Annaly is economically concentrated in the United States, where it qualifies as a U.S. REIT and invests in U.S...

  • •United States is the core market for mortgage assets and funding
  • •U.S. housing finance drives the underlying collateral and cash flows
  • •Capital raising occurs in U.S. public equity markets through ATM sales
  • •Repo and swap counterparties are concentrated in major financial centers
  • •Regulatory oversight is mainly U.S.-based through SEC, FINRA, CFTC, and IRS
  • •No meaningful country-level revenue disclosure was provided in the excerpts

Annaly’s strategy is centered on managing a leveraged mortgage portfolio to generate distributable earnings while...

01
Optimize mortgage portfolio spread incomeshort-term

Higher coupon income is the main driver of distributable earnings in a mortgage REIT model.

02
Manage funding and duration riskshort-term

Repo, securitized debt, and swaps determine how efficiently the company can finance assets through rate cycles.

03
Diversify earnings with servicing incomemedium-term

Net servicing income can offset pressure from spread compression and funding volatility.

04
Preserve regulatory and tax statuslong-term

REIT, broker-dealer, and adviser compliance are structural requirements for the business model.

Annaly’s earnings are highly sensitive to interest rates, mortgage spreads, prepayment behavior, and financing...

critical

Regulatory and tax qualification risk

Loss of REIT status or failure to meet broker-dealer/adviser/CFTC requirements would materially alter the business model and tax burden.

Scope
REIT qualification, SEC/FINRA/CFTC compliance
Materiality
high
high

Interest-rate and spread risk

The company earns spread income on leveraged mortgage assets, so changes in rates and mortgage spreads directly affect earnings available for distribution.

Scope
Residential mortgage loans, securities, repo funding, swaps
Materiality
high
high

Funding and liquidity risk

Annaly relies on repurchase agreements and securitized debt, which can become more expensive or less available in stressed markets.

Scope
Repo markets and securitization channels
Materiality
high
high

Cybersecurity risk

A breach could disrupt trading, servicing, financing, or reporting systems and lead to legal and reputational damage.

Scope
Company systems, service providers, counterparties
Materiality
medium
medium

AI and GenAI governance risk

Use of AI tools can create inaccurate outputs, bias, or compliance issues that affect decision-making and controls.

Scope
Internal processes and third-party service providers
Materiality
medium
Fair value measurement of mortgage assets and derivatives
Can materially change reported net income and book value
Earnings available for distribution
Important for dividend analysis and cash flow assessment
Interest income and prepayment assumptions
Affects net interest income and distributable earnings
Derivative and hedge accounting
Affects reported interest expense and risk management results
REIT tax and subsidiary accounting
Affects tax burden and cash available for shareholders

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: 11/08/2026