Thanks everyone for joining us. Happy to welcome AGNC back to what is now the UBS Financial Services Conference. Joined by President and CEO Peter Federico on the stage, and Head of Corporate Development Sean Reid is also joining us as well. You know, Peter, first of all, thanks for joining us.
Thank you for having us.
Just as we start, if you could just kinda level set us kind of where we are, you know, where Agency MBS spreads are today, you know, how does that kinda compare to the recent history?
Sure. Well, first off, just from a more of a macro perspective, I think as we start 2024, the Agency MBS market is, on a decidedly better footing than we have been over the last couple of years. We know that the Fed has engineered one of the most aggressive tightening campaigns we've ever experienced, with the Federal Funds Rate going up 525 basis points and the Fed reducing its balance sheet by $1.3 trillion during that time period. Mortgage spreads have increased rather dramatically from almost historic tights at the culmination of QE3 and the fall of 2021, significant spread widening to the point where mortgages hit really all-time wides, or close to all-time wides.
If you think about current coupon mortgage spreads, the production coupon or the par price mortgage, to a blend of 5- and 10-year Treasury rates, that got as tight as maybe 40 or 50 basis points when the Fed was very active. And recently, it's in the neighborhood of around 160 basis points. And at times, it's touched over the last 5 quarters close to 200 basis points. So we've seemed to have developed a nice new trend, a nice new channel for mortgage spreads, which may be the new norm, somewhere in the, call it, 140 to 190 basis point range. That's where we've operated now for almost 5 quarters. So that may be the new norm for the mortgage market for the foreseeable future.
I guess just on that, why, why is the new norm, you know, kinda wider today than it had been historically?
Yeah. Well, when you when you think back to the Great Financial Crisis, coming out of that, the Fed has entered, in a sense, the mortgage market in a number of different ways. They, they engineered QE1, QE2, QE3, and QE4. Three of those included mortgage-backed securities. So over that 14-year time period, the Fed was active in the mortgage market, really 11 out of those 14 years, and grew its position in Agency MBS from roughly 0 to ultimately where they are now, which is 28%, $2.4 trillion, 28% of the Agency mortgage-backed security market. So they own a very significant portion. So they've had great influence over the mortgage spread during that time period. Now they're backing away from the market, letting their portfolio gradually run off.
And that has led to mortgage spreads finding a new equilibrium that is sufficient to attract private capital to the mortgage market. I think that's the environment that we're operating in now. This spread over US Treasuries of in excess of about 150 basis points seems to be a clearing level where it's new capital is coming into the mortgage market, reallocating fixed income from corporates or from Treasuries into this asset class that enjoys the benefit of having the full faith of the government's support behind it in its explicit guarantee of support. It's a great investment, whether on a levered or unlevered basis, at these spread levels.
Then just kind of sticking with that, you know, how do you see kind of the relative spread of mortgages today versus corporates?
Yeah.
You know, and then just also kind of how are fixed income investors kind of positioned, you know, that, that have that discretion?
Yeah. Well, it's really interesting when you look back at the relative performance of Agency MBS relative to, say, investment-grade corporates, which is a good comparison. If you look at that relationship from 2022 to the previous 10 years, the average makes sense in that investment-grade corporates trade typically about 50 basis points in higher yield than Agency MBS. So higher yield for the security that has the lower credit. That shifted about a year ago. As the Fed has reduced its footprint in the mortgage market, mortgage spreads have underperformed corporates. And today, that relationship is at a historic wide, meaning Agency MBS, current coupon Agency MBS, are trading about 50 basis points higher yield. So you're of a security that has the full credit support of the US government trading 50 basis points above investment-grade corporates.
So when you look at it from that perspective and you look at Agency MBS relative to Treasuries, I think Agency MBS is one of the cheapest fixed income investments available to investors. It takes time for investors to reallocate and move out of other securities, out of corporate bonds, out of Treasuries into Agency MBS. But I think that transition is slowly starting to happen. But it does take time.
Got it. So, I mean, I guess with if that transition does happen, do you think we're kind of in a, you know, in a range, you know, where, where spreads can, can kinda stay?
I do. I think this range that we're trading in now may be the range that we stay in for the reasonably near term because the Fed will be continuing to back out of the mortgage market. Even when the Fed tapers its mortgage or its asset portfolio and ultimately stops the runoff of its balance sheet, they will likely continue to reduce their mortgage holdings in favor of Treasury holdings. So against that backdrop, over the next year or two, I would say that the current level is probably the clearing level for mortgages, which would be very good for our business. What we are looking for in our business, obviously, as a levered investor in Agency MBS spreads, essentially, we want spreads to be wide, and we want them to stay wide. And that may be the environment that we're entering right now.
Great. I guess one last macro topic before we.
Yeah.
Can get into more AGNC-specific. You know, I guess how do you think about, you know, a lot of there's been a lot of uncertainty, you know, about the path of the Fed. You know, how do you think about what that path of the Fed is going to be and how that ultimately impacts your business?
Yeah. Well, one of the reasons why I think the outlook is turning very, very positive for our business and for fixed income in general is just the fact that the Fed is now at the transition point in monetary policy. You know, we've gone from a monetary policy stance that was increasingly restrictive, creating a lot of uncertainty for fixed income investors for the last two years. Once inflation measures started to come down consistently, the Fed obviously pivoted in December of this year and now is in a sort of holding pattern for monetary policy. As we go through the next few months, it'll likely become clear that the Fed actually will start to reduce the federal funds rate, being in a much easier monetary policy stance. That is positive for the fixed income market. It's positive for Agency MBS.
What also often happens in environments like that is that you would expect interest rate volatility to come down. That would also be very positive for our business. It would be possible positive for our underlying asset class. So those are the two key things that I think are starting to reveal themselves in the fixed income market. The Fed obviously adopting a much friendlier monetary policy stance. That'll become clearer over time. Their balance sheet will become clearer over the next several months. Hopefully, interest rate volatility starts to decline. Agency MBS will benefit from all of those positive changes if that occurs.
So, you know, I guess moving to how you're kind of positioned today, you know, I guess how do you think about, you know, what your, you know, your risk levels are, your, you know, leverage, interest rate risk?
Yeah.
You know, and how you're positioned for, I guess, the current environment and how that might change?
Yeah. Well, the last 2 years have required us to be very defensive in our overall portfolio position because we were undergoing this macro transition in our asset class. So if you think about it, interest rate volatility was very high. From a leverage perspective, you sort of have to adjust for that. You have to operate with a little bit more of a defensive position in environments like this because you're trying to find the new equilibrium in the market, and you're not sure where that equilibrium is. We may have found that new equilibrium now. But if you look back at where we've been operating from a risk perspective, our leverage has been in the low 7s. In fact, at the end of last quarter, it was about 7 x.
Our unencumbered cash and liquidity position was slightly in excess of $5 billion or 66% of our equity. So we had a very strong liquidity position, very safe from a leverage perspective. What that means is it gives us a lot of capacity to take advantage of opportunities as they evolve over the next several months and over the next several years. So we've had to operate more defensively in the current environment. But that's just because of the great interest rate volatility that we've experienced.
And so I guess what do you look for to be comfortable to kind of take down some of that defensive posturing, you know, use some of that unencumbered assets or take up leverage?
Yeah. Well, it's gonna be very interesting. I think the next three months are gonna give us a lot of new information. One, over the next three months, what we need is greater clarity as to what the direction of the Fed's monetary policy is and what the Fed is going to do, right? Because right now, the market's still uncertain. Are they gonna ease this year? How many times? When will they ease? Maybe they not maybe not ease at all. There's still uncertainty about the direction of monetary policy because there's still uncertainty about the economic outlook and about inflation. We saw surprisingly strong inflation numbers in January, not surprising for the month of January, and similar to what we experienced last year. But that's made the fixed income market a little bit more unstable.
So over the next several months and including later this week with the important inflation data, we'll get a better view as to whether or not inflation is coming down and the Fed has gotten sufficiently confident in the trajectory of inflation. If that's the case, then the outlook for monetary policy and the federal funds rate will be much clearer. That'll be beneficial to the market. We'll also learn in March and probably May at those two meetings, we'll learn what the Fed's gonna do with their balance sheet. How are they gonna taper their balance sheet? What does that timeline look like? What is the composition of their portfolio gonna look like over time? So those two things will be very meaningful to the fixed income market and beneficial to us in terms of giving us a lot more insight into how volatile interest rates are going to be and how volatile mortgage spreads may be.
I guess how do you balance, right, 'cause the more certainty there is, the volatility comes down, spreads likely respond.
Yeah.
You know, so I guess how do you balance kind of, you know, taking.
Yeah.
Risk and, you know, trying to buy assets while spreads are wide but uncertainty.
Yeah.
Is high versus, you know, kind of waiting until there's more clarity, and less risk?
Yeah. That you're, you're 100% right. And that often is the case. And there's, there's always a challenge there. But I think one of the things that may make this environment uniquely different and positive from our perspective is that even though those will be positive developments, I think they're more positive for the broader fixed income market and not necessarily catalysts for significant spread tightening because I think the macro backdrop for Agency MBS is the one that's gonna drive spreads more long term, which is the fact that the Fed will likely be reducing its mortgage portfolio for a number of years. So over the as you look forward over the next two, three, four, five years, I think the Fed will continue to reduce its mortgage portfolio.
That'll put sort of a constant pressure on mortgage spreads and keep mortgage spreads in this current range, which would be very beneficial to our business. So we don't need mortgage spreads to tighten. From our perspective, spreads at this level give us a great opportunity to generate really attractive returns for shareholders.
I guess just if we could then just kind of dig into that comment, you know, spreads at this level, how does that kind of or what type of returns does that?
Yeah.
Translate into?
If you look at production coupon, where the yield of a new newly produced mortgage is relative to a blend of Treasury rates and a blend of swap rates, which is typically how we hedge our portfolio, thinking about that hedge from a sort of duration-neutral perspective, the net spread right now is somewhere in about 175 basis points. Levered like we lever it, somewhere in the sevens or mid-sevens, that would likely translate to an expected ROE of somewhere in the mid-teens, somewhere call it 14% to 18%. So that is, if you look back historically, one of the most attractive investment return opportunities we've ever had.
Got it. And now we were just talking about the macro. But, you know, if you look at that, how do you think about what are the risks that, you know, to that 14% to 18%, all right, what are the opportunities that that could be better?
Yeah. Well, there's certainly risk. And we've seen this over the last 5 quarters. We've seen episodes in the fixed income market where Treasury rates have come under pressure, interest rates have increased really significant, like we experienced in Q3 when the 10-year got just a little bit above 5%. In that environment, mortgages came under significant pressure, not because there was anything uniquely bad happening in the mortgage market, but what it shows is that the fixed income market, broadly speaking, is less liquid than it used to be. There's no real countercyclical demand anymore in the fixed income market. The marginal demand often for both Treasuries and mortgages can be money managers. And as they experience inflows, they buy. And that's a very positive technical. And when they experience outflows, like they did in Q3 , it's a very negative technical.
So we have seen episodes where that has driven mortgage spreads to wider levels. We have to be cautious in that environment. But it also can create a very attractive buy-in opportunity. We've just seen just in the last several weeks, we've seen mortgage spreads get to the tighter end of this range and now start to move back toward the middle of that range. So that's sort of the environment that we're working with right now.
Got it. And, you know, you talked a little bit about, you know, kind of how are you managing, you know, the risk and the leverage as kind of you float up and, you know, throughout that range?
Yeah.
You know, given that we've kind of tested the upper end of that range.
Yeah.
A couple of times, do you feel more confident to let, you know, kind of leverage risk?
Yeah.
Float up higher as you, you know, as we go through these inevitable bouts of volatility?
Yeah. That's good. That's exactly right. When you think about it from when you're managing a levered portfolio, what you're always trying to do is make sure you have sufficient liquidity and capacity to withstand adverse moves so as you're never forced to delever in an adverse environment. So when we always looking at our portfolio, we're looking at our position today. We're looking at our leverage today. We're looking at our unencumbered cash and equity bid position that I talked about and said, what will our portfolio look like if mortgage spreads widen significantly, if interest rates move significantly? And do you have sufficient capacity to withstand that adverse event?
In a sense, what would happen is if you have your leverage set properly for that environment, what will happen is naturally, as spreads widen to the upper end of that range, your leverage will naturally increase in that environment. But you'll still have sufficient capacity to withstand that environment. There'll be no adverse consequence of having to be forced to deliver. And conversely, in the opposite direction, when spreads tighten a lot, your leverage will naturally come down. The idea is to do nothing in between there and maintain that same core of assets. If you can do that, then you can maximize your value for shareholders. The challenge over the last couple of years has been that we've been trying to find the new trading level for mortgages. Now that we've found it, we're in a better, better environment to sort of manage leverage like I just described.
Got it. And then I guess just thinking about portfolio construction, you know, there's quite a wide range of coupons.
Yes.
You know, just given how much rates have moved over the past couple of years, you know, how do you think about the relative, you know, trade-offs, relative attractiveness and, and kind of where, where are you positioned today?
Yeah. It's a very unique mortgage market from that perspective, one of the most unique ones we've ever experienced because today, as you point out, there are 10 active coupons that you can trade in from 2s all the way up to 6.5 to even to 7s. So there's a great variety of opportunity across the coupon stack, if you will. More than 50% of the market is made up of 2% and 2.5%. So they continue to represent a significant share of the market. They're also the lowest yielding, longest duration assets, have the most prepayment protection, as you would expect, against a world where the primary mortgage rate is over 7%. We've typically moved with our portfolio up more toward the production coupon. And that's what we've done over the last few years.
We find the best return opportunities to be more in the middle to higher coupons where you have better yield, perhaps more negative convexity, but we can manage that negative convexity. But it gives us a better return opportunity. So we've, we've continued to sort of move up in coupon. But there are great opportunities across the coupon stack. And it really is driven by the marginal demand for mortgages. Money managers, for example, who are passive mortgage investors tend to buy the low coupons 'cause they represent the mortgage universe. Other more active managers like ourselves will overweight and buy the what we believe are the cheapest higher, higher coupons. So there's great opportunities across the coupon stack. There's also very interesting opportunities between traditional GSE, Agency MBS, UMBS, between Freddie and Fannie and Ginnie Mae Securities. Ginnie Mae's have gotten very, very cheap.
And we've increased our position in Ginnie Securities over the last year or so because they've represented really, really good value. They got extraordinarily cheap on an average basis relative to history over the last year as bank demand really, really weakened in, in light of the regional banking crisis. Ginnies tend to be bought by foreign buyers and by regional banks, both those backed away in the adverse environment that we've been in. Ginnies issuance was high. So that led to Ginnie Mae Securities being really attractive relative to UMBS.
Got it. And how do the prepay characteristics look on Ginnies versus, you know, Fannie Freddie's?
Yeah. Again, in today's environment, prepayment risk is very, very low. Dramatically, when you think about it, the mortgage market would require something like a 300 basis point move in the primary mortgage rate to have more than 30% of the market refinanceable. With that, that's a 50 basis point refinance perspective. So what we've experienced today is really historically low prepayment speeds, given where mortgage rates are, given where house prices are. Affordability really has led prepayments to be really representative of just sort of base turnover, no significant prepayment risk in the market right now.
Got it. Can you just talk about the funding markets?
Yeah.
For Agency MBS, you know, as the Fed is taking liquidity out, you know, has that had any impact?
Yeah. Well, one of the big developments that has been very positive for our business, if you look back to the Fed's intervention in the repo market for Agency MBS and for US Treasuries, the Fed, following the disruptions that we experienced in 2018 and 2019, realized that there have to be sufficient reserves in the system in order to keep the repo market for US Treasuries and Agency MBS tied to the federal funds rate. That's critical to monetary policy. And when we hit that inflection point in 2019, the Fed took a couple of significant steps, which really benefited our business and the liquidity of our asset class. One is they created an upper and lower bound of repo facilities that keep the repo rate for our underlying collateral tied to the federal funds rate. That's been really beneficial.
We have had no disruptions in the repo market for Agency MBS really in a number of years. Despite all of the other volatility that occurred and all the disruptions in the market, the funding markets continue to be very, very robust.
Got it. And no changes in haircuts with all the volatility?
No. In fact, remarkably, if you look at where Agency MBS haircuts are today versus where they were three or four or five years ago, they're actually lower across the board. We actually have our own broker-dealer Bethesda Securities where we finance about 50% of our funding through that captive broker-dealer, which works directly on the FICC. There's very attractive funding there. But even across our bilateral counterparties, we've seen no change. In fact, we've seen a lowering of haircuts. So the underlying collateral is often sought by our counterparties.
Great. Then moving to non-agency, you guys have the mandate to invest there. You know, you have a small amount of your portfolio there.
Yeah.
You know, I guess how do you think about the relative value of, of, you know, of credit investments today?
Yeah. We certainly have the capacity. We have a small credit portfolio. It represents about $1.2 billion of our assets or 3% to 4% of our capital. So it's a small allocation. We do not have a mandate to have a certain amount of our capital invested there. And it really just becomes an opportunity question, which is the cheapest asset, where can I get the best risk-adjusted return for our shareholders? And over the last year or so, our allocation of capital to the credit business has come down because Agency MBS has become so cheap. So when you think about where Agency MBS are trading from a return perspective, the liquidity that we just talked about from a funding perspective, it makes them extraordinarily cheap. I think they're the cheap relative to almost any credit asset. That's why our allocation has been low.
Got it. I guess how do you, you know, outside of relative value, what's your view on, you know, kind of the underlying credit? Is it more spread-driven? Are there any sort of credit concerns that you have?
With regard to.
The residential credit, you know, the underlying.
No. The underlying credit is good. You know, our biggest non-agency holdings are in the credit risk transfer securities. And they have performed extraordinarily well because of the great house price environment. These were all originated several years ago. We've enjoyed a great house price environment. They have made the credit underlying credit quality of those securities, many of which we invested were unrated at the time, have improved dramatically. So from a total return perspective, they've been great trades. The GSEs are also buying, tendering for those securities right now. So there tends to be a great opportunity to sell those back to the GSE. So they've been great investments. But there's just not many more of them right now in the current environment.
Just as you think about portfolio construction.
Yeah.
You know, how do you think about or weigh the potential benefits of diversification, you know, into credit versus, you know, kind of keeping the model more, you know, mono you know, more monoline and focused?
Yeah. Yeah. I think one of the great value propositions for investors in AGNC is our underlying asset class, Agency MBS, is an extremely difficult asset class for investors to access. Certainly, it's, it's almost impossible for a retail investor to access this underlying fixed income asset class. You can go retail investors can go to the Schwab or go to Fidelity and buy a corporate bond a lot easier than they can buy an Agency MBS. So our stock, our equity, common stock, gives investors the ability to access this difficult-to-access asset class in a really efficient way on a fully mark-to-market basis. So from our perspective, that's the value proposition to shareholders. We're largely Agency MBS. You know, generally speaking, what our risk parameters are. We're very transparent in what we own. We're very transparent in our operating parameters.
So investors can understand when you buy our common stock, you're buying into this asset class, which otherwise may not be available to you. It can be really valuable from their portfolio diversification benefit. If investors want to diversify and own credit, sometimes it's better for them to just do that diversification on their own rather than having us diversify into that asset class. So I think there's real value for the simplicity, if you will, of our business model and the transparency of it from an investor perspective and how they view AGNC stock in their overall portfolio construction and the diversification benefits it brings to their portfolio.
Great. Then, you know, on your dividend, you just talk about how you kind of set the dividend, right? If we look, your.
Yeah.
You know, your metric of core earnings, you know.
Yeah.
Has greatly outstripped the dividend for, you know, many years now.
Yeah.
Don't exactly remember how long, but a long time.
Yes.
You know, but you've kind of held the dividend steady. So can you just talk about how you and the board, you know, kind of think about setting the dividend?
Yeah.
What the right level is?
It's really important when you think about your dividend to have the right long-term perspective. You're right. If you look at certain of our accounting results, our net interest margin, for example, which is in excess of 300 basis points for several quarters now, or what you described as our core earnings or what we call our net spread and dollar roll income, last quarter, for example, that was $0.60 a share. If you think about that $0.60 a share relative to our equity base annualized, that's about a close to a 30% return. That is not consistent with where our portfolio would generate on a mark-to-market basis.
If we didn't have any of those accounting issues, then if you think about our portfolio fully marked to market, and it is fully marked to market from an NAV perspective, it's just not from an accounting earnings perspective, then the go-forward earnings on our portfolio would be much more in line with what I just talked about earlier, which is somewhere in the neighborhood of the mid-teens. That's the sort of economic earnings power of our portfolio on a go-forward long-term basis at current market valuations. So you have to think about that level relative to our dividend. And what's also important when you think about the dividend is how does your dividend compare to your overall cost of capital? So for us, we have a significant share of our capital with both common stock and low 20%, 22%, 23% preferred stock.
Well, the question from an investor perspective is, what is the total cost of capital? What is the break-even ROE when you take into account all of the common stock dividends that AGNC pays, all of the preferred stock dividends, and our operating costs, compare that number relative to our capital base. That number at the end of last quarter, for example, was around 15.5%. So our break-even ROE to meet all those obligations was about 15.5%, very well aligned with the economic return of our portfolio. And that's the way we think about it. Now, a lot of things can change over time. And we're constantly evaluating risk, volatility in the market, interest rate volatility. What do we expect our leverage to be on a go-forward basis? But that's, that's sort of the lens that we look at our dividend through.
Got it. So I guess, you know, if we think and try to project forward, you know, for the dividend, so I guess is it kind of the interplay between book value and what the equivalent, you know, returns that you can get out in the market? So.
Yes.
You know, to the extent that, you know, that those returns stay, you know, in this range, then you.
Yes.
You know, you would feel comfortable with, you know, the continued track record of dividend stability?
Yeah. That's exactly right. We've seen this occur over the last two years. When your book value is driven almost exclusively by mortgage spreads changing, what that's essentially saying is that your dividend yield is changing by your book value. But the go-forward return on your portfolio is moving consistent with that. So as your book value goes down because mortgage spreads widen, if you think about your dividend yield on book value, your dividend yield is going up in that environment. But your go-forward earnings on your portfolio, the mark-to-market return at those new valuation levels, has moved up as well.
So what we've seen over the last two years is, despite all the movement in our book value, our dividend yield has moved up and down consistent with, generally speaking, the economic earnings in our portfolio because that book value is being driven by spread changes as opposed to other economic factors like interest rates. Those certainly all come into play. They do have an impact on our book value. But it's been largely driven by the dramatic move in mortgage spreads over the last two years.
I guess the biggest risk to that equation would be volatility that kind of causes you to risk manage the portfolio at times when spreads are widening.
That's exactly right. When you think about investing in AGNC stock from a shareholder perspective, you're taking two key risks. One is you're taking interest rate risk, which we endeavor to actively manage and reduce. The other is mortgage spread risk. That's inherent to our business. Interest rate volatility does translate to higher costs in our business. As interest rates move, the duration, the yield, the mortgage moves longer in duration as interest rates go up and shorter in duration as interest rates go down. That requires us to rebalance our portfolio to pay to keep our interest rate risk low. That volatility can be costly and can erode returns over the long run. That's why, as we look at the environment today, mortgage spreads being wide and interest rate volatility potentially coming down set a very positive backdrop for our business.
Great. You know, and then you're, you know, I guess how are you thinking about, you know, kind of growing the business, incremental capital raises?
Yeah.
You know, kind of what are the factors that you look for?
Yeah. Well, there's certainly no need for us to grow for the sake of growing or the sake of being bigger. What you've seen AGNC do over the last several years is be very disciplined with our capital markets activities. So we always look at our capital markets activities through the lens of our existing shareholders. And when I when I say that, I mean, it's, can we raise capital or buy back capital when it's accretive to our existing shareholders? So in the environment that we've been operating in more recently, we've been able to issue capital through our at-the-market program, which is a very cost-effective way of selling common stock in the marketplace at very accretive levels from a book value perspective to our existing shareholders.
That activity also allows us to take those proceeds, redeploy them in the mortgage market, invest those proceeds in the same manner as our existing portfolio is levered, in which case it's accretive to our shareholders, certainly from a book value perspective and potentially from an earnings perspective. So that's activity that we'll continue to look to. If the opportunity is there, it has to be accretive from an issuance perspective. And we have to be able to deploy it at attractive levels. We have had those opportunities over the last several quarters.
Just how is the liquidity in the AGNC, you know, in the MBS market, you know, to the extent that you're raising capital or want to rotate the portfolio.
Yeah.
You know, how easy is it to find?
It's.
Attractive bonds?
You know, it's a very deep market. That's one of the great things about our asset class, $8.5 trillion worth of mortgages. But so there's plenty of liquidity, certainly for the type of transactions that we're talking about, hundreds of millions of billions of dollars' worth of mortgages trade every day. The liquidity overall in the market is not what it used to be. Coming out of the post-Great Financial Crisis, there are more regulations. There are fewer participants. Banks are not as active. Risk intermediaries are not available like they used to be. So there are times in the market where liquidity is more challenged and volatility is really high. But generally speaking, there is ample liquidity for our business, for sure.
Great. You know, with that, I think we're about out of time. So, thank you. Thank you for joining us.
Appreciate it. Thank you for your time.
All right.