Annaly Capital Management’s Onslow Bay Platform Marks 100th Residential Whole Loan Securitization, Surpassing $45 Billion in Issuance and Setting a New Standard for Non-QM Innovation
Annaly Capital Management, Inc. (NYSE: NLY), one of the nation’s largest mortgage finance companies, has reached a defining moment in the evolution of its residential credit strategy. The company announced that its wholly owned subsidiary, Onslow Bay Financial LLC—widely known in the market as OBX—has successfully closed its 100th residential whole loan securitization: OBX 2025-NQM22. This milestone is more than a celebratory number—it signifies the maturation of a platform that has consistently shaped, influenced, and expanded the structure of non-agency mortgage-backed securitizations (MBS) over the last decade.
The transaction, a privately placed $438.6 million securitization backed by Non-QM (non-qualified mortgage) residential loans, marks the latest achievement in a series of strategic advancements for the Annaly subsidiary. Since completing its first securitization in 2015, Onslow Bay has now surpassed $45 billion in cumulative issuance, including $32 billion in Non-QM issuances alone, cementing its status as a top-tier originator, aggregator, and issuer within the non-agency space.
A Decade of Platform Growth and Innovation
When Onslow Bay initially launched its securitization platform in 2015, the Non-QM market was still emerging. Investors were seeking new structures that could deliver risk-adjusted yield opportunities while remaining insulated from the underwriting weaknesses that characterized the pre-2008 “Alt-A” era. In response, Onslow Bay built an ecosystem that emphasized data transparency, disciplined credit, and creative structuring—foundations that helped restore confidence in the non-agency securitization market.
Now, ten years later, the OBX platform stands as the largest non-bank issuer and the second largest issuer overall of both Prime Jumbo and Expanded Credit mortgage-backed securities (MBS). As of the third quarter of 2025, the platform maintains an impressive borrower profile with an average FICO score of 759 and an Original Loan-to-Value (LTV) ratio of 67%, positioning its deals among the highest-quality cohorts in the sector.
This longstanding commitment to quality and innovation has powered Onslow Bay’s expansion—even during periods marked by rate volatility, regulatory changes, and shifting investor demand. The closing of OBX 2025-NQM22 serves as the culmination of those efforts, while also signaling renewed momentum for continued growth.
OBX 2025-NQM22: A Milestone Transaction
The 100th securitization—OBX 2025-NQM22—is backed by a diversified pool of Non-QM loans and structured to optimize both investor appeal and market efficiency. While the transaction size of $438.6 million reflects typical volumes within the Non-QM segment, its significance lies in its alignment with Onslow Bay’s broader objectives: to build larger, more efficient deal structures and to offer investors refined, flexible risk-return profiles.
This latest offering continues the OBX platform’s trend of designing securitizations that prioritize clarity, strong collateral characteristics, and capital-efficient structuring. The transaction exemplifies the platform’s leadership in elevating standards for Non-QM securitizations while expanding investor participation across multiple buyer categories, from insurance companies to hedge funds and specialty credit managers.
Achievements Shaping the Non-QM Market
In its announcement, Annaly highlighted a series of recent achievements that reflect the platform’s continuous evolution. Together, these advancements illustrate why Onslow Bay has earned a reputation as one of the most forward-thinking issuers in the non-agency market:
1. Growth Through Privately Placed Transactions
Onslow Bay has closed multiple privately placed securitizations designed specifically to meet bespoke investor preferences. Private placements allow the platform to tailor deal structures, tranche sizing, collateral composition, and credit enhancement levels with precision—an advantage that has resonated strongly with institutional buyers seeking specialization in their MBS allocations.
This strategy has strengthened investor relationships, expanded the buyer base, and enabled more predictable execution amid fluctuating market conditions.
2. First Floating-Rate Tranche in a Non-QM Securitization
One of the most notable structural innovations from Onslow Bay is the introduction of a floating-rate tranche within a Non-QM MBS—making OBX the first issuer to implement and price such a feature.
Floating-rate structures have appealed to investors seeking duration flexibility at a time when interest rate projections continue to shift. By integrating this option, Onslow Bay helped reduce duration risk for investors and expanded the toolkit for managing rate exposure within the Non-QM asset class.
3. Introduction of a Front Cash Flow / Last Cash Flow Structure
Onslow Bay also introduced a front-cash-flow/last-cash-flow securitization framework, allowing the platform to optimize risk distribution across different investor preferences. This structure essentially divides the cash flows into early-pay and late-pay tranches, giving investors more control over the timing of expected returns.
This innovation reflects the platform’s commitment to aligning securitization engineering with portfolio strategy—an approach that enhances liquidity and operational clarity for all counterparties.
4. Onslow Bay’s Largest Deal to Date: OBX 2025-NQM18
Earlier in 2025, the platform priced OBX 2025-NQM18, its largest securitization ever, at $743 million. This demonstrated Annaly’s ability to meaningfully scale issuance volume while keeping structure integrity intact.
The company stated that it aims to steadily increase transaction sizes over time by continuing to attract a broader base of investors—many of whom have responded positively to Onslow Bay’s structural advancements and consistent track record.
5. First Structured Repo Transaction for Retained OBX Securities
In another first, Onslow Bay completed its inaugural structured repo transaction to provide non-mark-to-market (non-MTM) financing for retained securities. This step not only offers greater balance sheet stability for Annaly but also enhances liquidity and financing efficiency within the OBX ecosystem.
6. Redemption of First Non-QM Securitization
Annaly also redeemed the platform’s first callable Non-QM transaction, OBX 2022-NQM8, highlighting the strong performance and favorable financing conditions across the market. With declining securitization cost of funds and competitive Non-QM mortgage rates, Onslow Bay maintains an active pipeline of future redemptions.
Leadership Perspective: A Platform Built on Discipline and Innovation
Reflecting on the milestone, Mike Fania, Annaly’s Co-Chief Investment Officer and Head of Residential Credit, emphasized the significance of Onslow Bay’s evolution and the broad market confidence it has earned.
“Closing our 100th securitization is a testament to the strength and consistency of the Onslow Bay platform, which has become a preeminent leader in the Non-Agency market,” Fania said.
He highlighted the platform’s disciplined approach to credit selection, structuring, and investor engagement as key factors in its enduring success. These attributes have allowed Onslow Bay to expand market share, grow loan volume, and deliver superior risk-adjusted returns to investors across different rate environments.
At the same time, Fania underscored Annaly’s commitment to maintaining strong borrower quality—noting that, even with growing issuance volumes, the platform continues to maintain some of the lowest delinquency rates in the non-agency market.
Fania also credited both investors and internal team members for their roles in reaching this critical milestone:
“We’d like to thank our valued securitization investors whose continued partnership and confidence in the Onslow Bay platform have been instrumental in reaching this milestone. We’re equally grateful to our dedicated team members who work tirelessly to make all of these achievements possible.”
A Platform Built for Scale, Stability, and Expanding Investor Appetite
Onslow Bay’s sustained performance reflects a model that integrates loan sourcing, underwriting discipline, asset management, and capital markets execution seamlessly. The platform controls a significant portion of its loan production process—including guidelines, pricing, exceptions, originator relationships, servicing oversight, and loss mitigation strategies. This vertical integration gives Annaly the ability to maintain high credit standards even as the Non-QM market continues to grow.
Institutional investors seeking exposure to non-agency credit have frequently turned to the OBX shelf due to its transparency, high-quality collateral, efficient structural design, and consistent performance history. As the Non-QM segment continues to expand—driven by the rise of self-employed borrowers, alternative income profiles, and high-quality credit outside agency parameters—Onslow Bay remains uniquely positioned to lead.
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