Agency Bond Values Boosted By Falling LT Treasury Rates

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Agency Bond Values Boosted By Falling LT Treasury Rates

Sterne Agee analysts Henry J. Coffey, Kenneth James, and Calvin Hotrum take a close look at American Capital Agency and Two Harbors Investment leading up to their quarterly reports, while discussing Agency Bond Values.

While we have more insight into the factors driving value for our MSR/Credit mortgage real estate investment trusts (M REITs), we would remiss if we did not point out the benefit to the agency M REITs of falling long term treasury rates. The two agency only M REITs we follow, American Capital Agency Corp. (NASDAQ:AGNC) and Annaly Capital Management, Inc. (NYSE:NLY), are selling at ~ 85% of book value and