Annaly's FIDAC is Investment Manager for London-listed Prodesse Investment Limited, which debuted on April 6, 2005.

NEW YORK -- Annaly Mortgage Management, Inc. (NYSE: NLY) is pleased to announce that its wholly-owned subsidiary, FIDAC, is the investment manager for Prodesse Investment Limited, an investment company launched on April 6. Prodesse, which is listed on the London Stock Exchange under the ticker PRD, raised US$265 million in the initial public offering (before the exercise of the over-allotment option of up to 15% by the underwriters). UBS Investment Bank was the sole global co-ordinator, bookrunner, financial advisor and sponsor, and Merrill Lynch International was joint lead manager.

The investment strategy of Prodesse, a newly established limited liability Guernsey-incorporated closed-end investment company, is to provide net income for distribution to shareholders from the spread between the interest income earned from a portfolio of residential mortgage-backed securities and the cost of repurchase agreements used to finance their acquisition. Prodesse will utilize leverage within a debt-to-equity band of 5:1 to 10:1. For its services, FIDAC will be paid a management fee of 20 basis points based on gross assets under management.

Ron Kazel, Executive Vice President for Annaly, commented on the launch of Prodesse. "Our FIDAC team has worked hard to create a structure that is designed to generate a tax-efficient, compelling investment yield using high credit-quality assets. 'Prodesse' comes from the Annaly motto, 'Prodesse Non Nocere', which means 'proceed without fear.' We continue to proceed with expanding our asset management business through this offering and look forward to expanding our presence around the world."

Annaly manages assets on behalf of institutional and individual investors worldwide through Annaly and through the funds managed by its wholly-owned registered investment advisor, FIDAC. At December 31, 2004, Annaly and FIDAC had gross assets under management of approximately $36 billion. Annaly's principal business objective is to generate net income for distribution to investors from the spread between the interest income on its mortgage-backed securities and the cost of borrowing to finance their acquisition and from dividends the Annaly receives from FIDAC, which earns investment advisory fee income. Annaly, a Maryland Corporation, has elected to be taxed as a real estate investment trust ("REIT").

This news release and our public documents to which we refer contain or incorporate by reference certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements which are based on various assumptions (some of which are beyond our control) may be identified by reference to a future period or periods or by the use of forward-looking terminology, such as "may," "will," "believe," "expect," "anticipate," "continue," or similar terms or variations on those terms or the negative of those terms. Actual results could differ materially from those set forth in forward-looking statements due to a variety of factors, including, but not limited to, changes in interest rates, changes in yield curve, changes in prepayment rates, the availability of mortgage-backed securities for purchase, the availability of financing and, if available, the terms of any financing, FIDAC's clients removal of assets FIDAC manages, FIDAC's regulatory requirements, and competition in the investment management business. For a discussion of the risks and uncertainties which could cause actual results to differ from those contained in the forward-looking statements, see "Risk factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2004. We do not undertake, and specifically disclaim any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.