operating environment. Throughout the year, we continued to diversify and expand our financing capabilities, including strong production from our securitization platform and expanded financing capacity for our credit businesses. Our Onslow Bay subsidiary remained a programmatic issuer of Prime Jumbo & Expanded Credit MBS, ending the year as the top non-bank issuer and second largest issuer overall(9). Since the beginning of 2023, Onslow Bay has issued 19 securitizations totaling $7.7 billion in proceeds(10). Further, we added $1.3 billion in warehouse capacity across our Residential Credit and MSR strategies, ending the year with $3.6 billion of total credit facility financing capacity. One benefit of Annaly’s diversified housing finance model is that we are able to finance our higher cost, higher barrier-to-entry credit businesses with lower cost repurchase market borrowings afforded by Agency MBS, effectively allowing Annaly to grow these verticals at lower financing costs than other market participants. COMMITMENT TO BEST-IN-CLASS CORPORATE RESPONSIBILITY & GOVERNANCE Core to Annaly’s culture is our long-standing commitment to corporate responsibility, bestin-class corporate governance and a culture that fosters and champions diverse talent and leadership. This past year, we were proud to issue our fourth annual ESG Report, highlighting our history of responsible housing finance leadership and our ongoing efforts to develop and execute our ESG strategy. We also appointed three new highly qualified independent directors to our Board in 2023 – adding a breadth of complementary skills and experiences and underscoring the Board’s goal of bringing a diverse range of backgrounds and perspectives to strengthen our industry leading corporate governance. OUTLOOK & CONCLUSION As we begin 2024, our outlook for each of our three investment strategies is optimistic. While the macro-economic path forward remains somewhat uncertain, all indications suggest that that we are likely entering a phase of less restrictive monetary policy, in which the Fed is expected to gradually lower policy rates and slow its balance sheet runoff. Along with potentially lower interest rate volatility and a more balanced supply and demand picture, the technical outlook for Agency MBS looks much improved entering 2024. Meanwhile, spreads remain at historically elevated levels, which supports compelling new money investment returns. In Residential Credit, with the housing market continuing to perform above expectations supported by historically low inventory, we are well-positioned to continue gaining share in the non-Agency market. In fact, in March 2024 we completed our largest securitization ever – a testament to the strong production from our whole loan correspondent channel(11). While we expect to continue to grow this business, we remain committed to keenly focusing on credit quality. We are also poised to continue growing our MSR business given our unique positioning as a preferred partner to originators. With supply expected to be robust in light of ongoing capital needs from the Note: Please refer to Glossary for defined terms and “Message from Our CEO” in Endnotes section for footnoted information. $3.6 billion total credit facility financing capacity With the largest balance sheet in the sector and the most financing tools at our disposal, we are afforded significant optionality in how we grow and operate our business – a clear competitive advantage. 10 ANNALY CAPITAL MANAGEMENT, INC.
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