New York November 2, 2001Annaly Mortgage Management, Inc. (NYSE:NLY) today issued a statement in response to the US Treasury Department's announcement on October 31 st that it would discontinue selling new issues of the thirty-year bond.
“The Treasury's recent actions on the long bond, one of the main AAA assets competing for capital, serve to further increase the value of all other AAA assets,” commented Mike Farrell, Annaly's Chairman and CEO. “This should prove to be a positive development for Annaly as a major focus of our strategy continues to be the generation of long duration, high quality yields backed by those AAA rated securities.” “In addition, we infer from the Treasury's statement that its intention is to finance more through the short end of the yield curve. This will in turn limit the further deterioration of yields on the front end and create an even wider positive spread between Federal Funds financing expense and coupon income. Annaly's ability to raise capital and invest it in AAA-backed securities at the front end of the cycle and position itself to benefit from that positive spread is what serves to generate our strong returns.” “As we have made clear to the market in the past, we have been cautious about the long end of the Treasury market for several quarters. The recent move by the Treasury in validating those concerns strengthens our overall position. We have always viewed Annaly, in some manners, as a long duration bond alternative that is backed by AAA assets and the continued execution of our strategy will drive competitive returns for our shareholders going forward,” Farrell concluded.
This news release and our public documents to which we refer contain or incorporate by reference certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements which are based on various assumptions (some of which are beyond our control) may be identified by reference to a future period or periods or by the use of forward-looking terminology, such as “may,” “will,” “believe,” “expect,” “anticipate,” “continue,” or similar terms or variations on those terms or the negative of those terms. Actual results could differ materially from those set forth in forward-looking statements due to a variety of factors, including, but not limited to, changes in interest rates, changes in yield curve, changes in prepayment rates, the availability of mortgage-backed securities for purchase, the availability of financing and, if available, the terms of any financing. For a discussion of the risks and uncertainties which could cause actual results to differ from those contained in the forward-looking statements, see “Risk factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2000. We do not undertake, and specifically disclaim any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.
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