American Capital Agency Corp: A Good Long Term Yield Play
By Sol Palha:
Basic Overview
American Capital Agency Corp. (AGNC) invests exclusively in fixed rate agency securities that are implicitly guaranteed by the US government. This limits its credit risk. It is among a select group of companies that has increased its dividends during the economic crisis. American Capital Agency Corp. funds its investments primarily through short-term borrowings structured as repurchase agreements. It has elected to be taxed as a REIT under the Internal Revenue Code of 1986. As a REIT, the company would not be subject to federal income tax, provided it distributes at least 90% of its taxable income to its shareholders. It is externally managed by American Capital AGNC Management, LLC, which is an affiliate of American Capital, Ltd. American Capital Agency Corp. was founded in 2008 and is based in Bethesda, Maryland.
Reasons to be bullish on American Capital Agency Corp
- By investing exclusively in fixed rate agency securities
- Original article
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