Annaly Capital Management Inc. has announced the formation of Shannon Funding LLC, a wholly-owned subsidiary that intends to provide warehouse financing and other services to residential mortgage originators in the United States. Shannon will be led by Bruce E. Watterson, a veteran mortgage finance executive who most recently was a managing director at LPS Capital Markets, a division of Lender Processing Services Inc. (LPS). Shannon, which will operate out of offices in Bellevue, Wash., plans to begin operations in the first quarter of 2011. "Now more than ever, new mortgage origination activity is dominated by the handful of large money center banks with ready access to capital," said Michael A.J. Farrell, chairman, chief executive officer and president of Annaly. "Small- and medium-sized mortgage companies with good credit cultures and successful track records are challenged to source warehouse funding in this environment. Shannon plans to provide funding to these smaller participants in order to help them generate well-underwritten mortgage product. As opportunities present themselves in the future, Shannon will expand its strategy and operations into additional markets." Watterson has more than 25 years of experience in mortgage banking, due diligence, servicing and technology. He was founder of Watterson-Prime LLC which provided due diligence, portfolio stratification and other consulting services to buyers and sellers of financial residential and commercial mortgage assets, and also launched Watterson-Prime Software Inc., a software and technology company serving the asset-backed finance industry. Watterson's prior experience includes senior positions in the mortgage, hedging and structuring groups at First Boston and Shearson Lehman Hutton, as well as head of the due diligence practice at PricewaterhouseCoopers LLP. Watterson received his BA degree at Miami University in Oxford, Ohio. Annaly manages assets on behalf of institutional and individual investors worldwide. The company's principal business objective is to generate net income for distribution to investors from its Investment Securities and from dividends it receives from its subsidiaries. Annaly is a Maryland corporation that has elected to be taxed as a real estate investment trust (REIT). For more information, visit www.annaly.com.