Dynex Capital Inc
NYSE:DX
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Dynex Capital Inc
NYSE:DX
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US |
Dynex Capital Inc
Dynex Capital, Inc. is an internally managed mortgage real estate investment trust, which invests in residential and commercial mortgage-backed securities on a leveraged basis. The company is headquartered in Glen Allen, Virginia and currently employs 19 full-time employees. The firm's objective is to provide attractive risk-adjusted returns to its shareholders over the long term that are reflective of a leveraged, high quality fixed income portfolio with a focus on capital preservation. The firm seeks to provide returns to its shareholders primarily through the payment of regular dividends and through capital appreciation of its investments. The firm primarily invests in Agency MBS, including residential MBS (RMBS), commercial MBS (CMBS) and CMBS interest-only (IO) securities. The firm also have an investment in non-Agency MBS, which consist mainly of CMBS IO.
Dynex Capital, Inc. is an internally managed mortgage real estate investment trust, which invests in residential and commercial mortgage-backed securities on a leveraged basis. The company is headquartered in Glen Allen, Virginia and currently employs 19 full-time employees. The firm's objective is to provide attractive risk-adjusted returns to its shareholders over the long term that are reflective of a leveraged, high quality fixed income portfolio with a focus on capital preservation. The firm seeks to provide returns to its shareholders primarily through the payment of regular dividends and through capital appreciation of its investments. The firm primarily invests in Agency MBS, including residential MBS (RMBS), commercial MBS (CMBS) and CMBS interest-only (IO) securities. The firm also have an investment in non-Agency MBS, which consist mainly of CMBS IO.
Book value: Dynex ended the quarter at $12.6 per share, with economic return of negative 2.5% as dividends were more than offset by an $0.85 per share drop in book value.
Liquidity and leverage: The company ended the quarter with leverage at 8.6x and $1.3 billion in cash and unencumbered securities, giving management room to act during volatility.
Capital deployment: Dynex said it grew total capital by 18% and deployed $442 million during the quarter, taking advantage of wider MBS spreads.
Spread outlook: Management remains constructive on agency MBS spreads, saying they tightened after quarter end and could move toward 120 basis points over time, with a longer-term equilibrium closer to 100 basis points.
Portfolio shift: The company continued reducing TBA exposure and favored pools over the most callable securities, saying security selection is a major source of alpha.
Funding and hedging: Financing conditions stayed favorable, repo markets functioned smoothly, and about 70% of the portfolio was hedged with interest rate swaps on a DV01 basis at quarter end.
Book value update: As of Friday’s close, estimated book value was $13.31 per share, up 5.6% versus quarter end, net of accrued common dividend.
