Annaly outlines portfolio growth and a larger role for credit and MSR

Transcript intelligence

What changed

Annaly raised $560 million of common equity through its ATM in Q4, bringing 2025 equity raised to $2.9 billion. Management also highlighted its expanded MSR activity and a longer-term allocation target of 50% Agency, 30% residential credit, and 20% MSR.

Guidance delta

Formal guidance sentiment was not provided. Management expressed confidence in the 2026 outlook and outlined plans to expand residential credit and MSR while keeping Agency assets as the portfolio anchor.

Key takeaways

• Management reported an 8.6% Q4 economic return, a 20% full-year economic return, and a 40% shareholder return.
• Equity raises supported roughly 30% portfolio growth while leverage remained 5.6x.
• Management plans to increase residential-credit and MSR exposure while maintaining Agency MBS as the core anchor.
• The opportunity set depends on spreads, housing policy, prepayments, and the sustainability of portfolio returns.

Management priorities

• Expand participation in coupon MSR markets and grow the MSR footprint across Fannie and Freddie exchange platforms.
• Increase residential-credit and non-QM exposure toward roughly 30% of capital over time.
• Maintain Agency MBS as the portfolio anchor while shifting allocation toward non-Agency assets and MSR.
• Use equity raises and the ATM program to support portfolio growth.