Annaly Capital Management is a mortgage REIT that borrows at short-term rates and invests in longer-duration residential mortgage assets, earning the spread between the two. Annaly's portfolio is built around three asset types: Agency MBS (securities guaranteed by Fannie Mae, Freddie Mac, or Ginnie Mae, representing roughly 62% of capital), non-Agency residential credit (~19% of capital), and mortgage servicing rights, or MSR (~19% of capital). Agency MBS carries no credit risk but exposes Annaly to interest rate and prepayment risk. Non-Agency credit — originated through Annaly's correspondent lending platform, Onslow Bay Financial, and securitized under its OBX program — carries credit risk but offers higher yields. MSR generates servicing fees and float income; Annaly's MSR portfolio is concentrated in low note-rate loans (~3.28% average), meaning borrowers have little incentive to refinance, producing predictable cash flows. Annaly borrows primarily through repurchase agreements and uses interest rate swaps to hedge duration risk. Being structured as a REIT, Annaly must distribute at least 90% of taxable income, so it grows primarily by issuing equity and deploying capital into target assets — raising $2.9B in equity in FY25 alone. Annaly's long-term target is to shift capital toward Residential Credit and MSR, away from Agency, targeting a 50%/30%/20% mix over time.