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Annaly Capital Management, Inc. Message Board

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  • reitsbyziggy reitsbyziggy Aug 26, 2005 4:48 PM Flag

    2/10 spread now 16 bps.

    Everyone refers to the 2/10 spread...is this just a statement of how flat the yield curve is becoming? Don't these mortgage REITS borrow at about a 90 day rate and the newly purchased mortgages have interest rates that track the 10 year rate...if thats the case then their NEW BUSINESS spread(before prepayment risk) is the difference between these two rates isn't it? Now I realize that the average spread is lower because of the delay in rate resets.

    I understand that the market value of the ARM's in a portfolio tracks the 2 year interest rate because of the prepayment risk...is this correct?

    I am watching MFA because I think its a better deal than NLY...however its still too early to get in!!

 
NLY
11.205-0.025(-0.22%)12:49 PMEST

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