Annaly Capital Management reported a GAAP net loss of $1.36 per average common share for the third quarter, driven mainly by unrealized losses on its investment portfolio as interest rates rose, while earnings available for distribution (EAD) were $0.80 per share, above the $0.75 quarterly dividend. Book value fell 11.4% to $17.86 per share, and the economic return was negative 7.6% as the 10-year Treasury yield rose 82 basis points. The company raised $757 million of common equity through its at-the-market program and redeemed $442.5 million of Series I preferred stock, while economic leverage rose to 5.9x from 5.6x. Management said the Agency MBS portfolio was positioned defensively, and that housing activity is likely to stay subdued due to affordability challenges and the borrower lock-in effect, with implied volatility in September reaching its highest level in 18 months.
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