AGNC Investment Stock

AGNC Investment Corp. operates as a real estate investment trust (REIT).

The company provides private capital to the U.S. housing market, enhancing liquidity in the residential real estate mortgage markets and, in turn, facilitating home ownership in the U.S. The company invests primarily in Agency residential mortgage-backed securities (Agency RMBS) on a leveraged basis. These investments consist of residential mortgage pass-through securities and collateralized mortgage obligations for which the principal and interest payments are guaranteed by a U.S. Government-sponsored enterprise, such as the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac, and together with Fannie Mae, the GSEs), or by a U.S. Government agency, such as the Government National Mortgage Association (Ginnie Mae). The company may also invest in other assets related to the housing, mortgage or real estate markets that are not guaranteed by a GSE or U.S. Government agency.

Targeted Investments

Asset selection is a central component of the company's overall investment approach. The company's investments consist predominantly of Agency RMBS which, in addition to carrying a GSE or U.S. Government guarantee against loss of principal, are considered a cornerstone of the U.S. financial system. The $9 trillion Agency market plays a vital role in providing liquidity to homeowners and prospective homeowners to purchase or refinance homes.

The company's team of investment professionals has decades of experience investing in Agency RMBS. The company's asset selection process involves assessing relative risk-return profiles against the backdrop of broader market conditions. The company's team of investment professionals seeks to select assets with favorable underlying loan characteristics utilizing sophisticated modeling techniques to analyze each asset's risk profile and optimize returns over the life of the investment.

Agency Securities

Agency Residential Mortgage-Backed Securities: Agency RMBS consist of pass-through certificates representing interests in pools of mortgage loans secured by residential real property. Monthly payments of principal and interest made by the individual borrowers on the mortgage loans underlying the pools are in effect passed through to the security holders, after deducting guarantee and servicer fees. In general, mortgage pass-through certificates distribute cash flows from the underlying collateral on a pro rata basis among the security holders. Security holders also receive guarantor advances of principal and interest for delinquent loans in the mortgage pools. The company may also invest in Agency collateralized mortgage obligations (CMOs), which are structured instruments backed by a pool of Agency mortgage-backed securities.

To-Be-Announced Forward Contracts (TBAs): TBAs are forward contracts to purchase or sell Agency RMBS in the TBA market. TBA contracts specify the coupon rate, issuer, term and face value of the bonds to be delivered, with the actual bonds to be delivered only identified shortly before the TBA settlement date.

Non-Agency Securities

Credit Risk Transfer (CRT) Securities: CRT securities are risk sharing instruments that transfer a portion of the risk associated with credit losses within pools of conventional residential mortgage loans from the GSEs and/or third- parties to private investors. Full repayment of the original principal balance of CRT securities is not guaranteed by the GSE or other third-party; rather, credit risk transfer is achieved by writing down the outstanding principal balance of the CRT security if credit losses on the related pool of loans exceed certain thresholds.

Non-Agency Residential Mortgage-Backed Securities (Non-Agency RMBS): Non-Agency RMBS are structured securities backed by pools of residential mortgages packaged and issued by private institutions, such as a commercial bank or non-bank lender. Certain tranches of non-Agency RMBS may benefit from credit enhancement derived from structural elements, such as subordination, over-collateralization or insurance. The company may purchase investment grade instruments that benefit from credit enhancement and non-investment grade instruments that are structured to absorb more credit risk. The company focuses primarily on non-Agency securities where the underlying mortgages are secured by residential properties within the United States, which may be comprised of prime, non-prime, qualified and non-qualified mortgage loans.

Commercial Mortgage-Backed Securities (CMBS): CMBS are securities backed by a pool of loans secured by one or more commercial properties. CMBS may also consist of a single loan for a single asset or multiple loans for a group of cross-collateralized assets of a single-borrower. CMBS are typically structured as multiple classes of securities where cash flows are distributed following a predetermined waterfall, which may give priority to selected classes while subordinating other classes. The company may invest across the capital structure of these securities. The company intends to focus on CMBS where the underlying collateral is secured by commercial properties located within the United States.

Regulatory Requirements

The company conducts its business so as not to become regulated as an investment company under the Investment Company Act in reliance on the exemption provided by Section 3(c)(5)(C) of the Investment Company Act. Section 3(c)(5)(C), as interpreted by the staff of the SEC, requires that: at least 55% of its investment portfolio consists of mortgages and other liens on and interest in real estate, or qualifying real estate interests, and at least 80% of its investment portfolio consists of qualifying real estate interests plus real estate-related assets.

BES is subject to ongoing membership and regulatory requirements as a member of the Fixed Income Clearing Corporation (FICC) and Fixed Income Clearing Corporation (FINRA) and as a registered broker-dealer that include but are not limited to trade practices, use and safekeeping of funds and securities, capital structure, recordkeeping and conduct of directors, officers and employees.

Tax Status

The company has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended. As a REIT, the company is required to distribute annually 90% of its taxable income, and it will generally not be subject to U.S. federal or state corporate income tax to the extent that it distributes all its annual taxable income to its stockholders on a timely basis.

History

AGNC Investment Corp., formerly known as American Capital Agency Corp., was founded in 2008. The company was incorporated in 2008.