Dynex Capital is an internally managed mortgage real estate investment trust, which primarily invests in residential and commercial mortgage-backed securities (MBS) on a leveraged basis. Co. finances its investments principally with borrowings under repurchase agreements. Co.'s investments consist primarily of Agency MBS including residential MBS, commercial MBS (CMBS) and CMBS interest-only (IO) securities and non-Agency MBS, which consist mainly of CMBS IO. Agency MBS have a guaranty of principal payment by an agency of the U.S. government or a U.S. government-sponsored entity. Non-Agency MBS are issued by non-governmental enterprises and do not have a guaranty of principal payment.