I want to discuss a few specific preferred shares. Many income investors are looking to the preferred shares of mREITs as treasury yields and high credit quality yields are hitting exceptionally low levels. Yields on junk bonds are also fairly weak when accounting for the income problems those funds may have due to defaults. Specifically, if they are holding bonds on companies that are mining for natural resources or drilling for oil, there is a substantial risk of default. As a result, investors can see the preferred shares of mREITs as a potentially interesting place to get a better yield with a lower probability of a cut in the distribution (absent a call). Since Annaly Capital Management ( NYSE: NLY ) is the largest of the mREITs, it also attracts more attention. Recently Annaly Capital Management used their bulk to acquire Hatteras Financial Corp. (HTS) in a substantial merger. Annaly Preferred Shares Annaly has three different classes of preferred shares.