Stable earnings profile supporting fixed-charge coverage (excluding repurchase agreements) of nearly 3.7x in 2006, a decrease from 3.9x in 2005. Fixed-charge coverage at the end of the first half of 2007 was 3.5x. Improving operating company dividend capacity supporting strong statutory fixed-charge coverage of 2.3x in 2006 and 3.1x as of June 30, 2007. Strong liquidity and demonstrated capital markets access. As of year-end 2006, the company had relatively high debt leverage of 31%, debt-plus-preferred to total capital of 46% excluding FAS 115, and increased double leverage at 133%. Significant interest rate risk exposure driven by negative convexity associated with large holdings in callable agency bonds. Reliance on a single operating company with product concentration for debt-servicing cash flow, though
