Annaly Capital Management (NLY) faced a volatile third quarter as the 10-year Treasury rate surged to a multi-decade high, weighing on fixed-income values. Book value per common share fell from $20.15 to $17.86, economic return was -7.6%, and the company posted a GAAP loss of $1.36 per share. However, earnings available for distribution (EAD) rose to $0.80 per share, more than covering its $0.75-per-share dividend, which was raised from $0.70 in June. The REIT credited its low leverage and minimal duration exposure, while its mortgage servicing rights (MSR) portfolio grew 22% to $4.3 billion and it raised $757 million of capital. The article notes Annaly has cut its dividend before and could do so again if market conditions and returns deteriorate significantly.
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