Peter Federico: Sure. I appreciate the question. We did raise a little bit of capital in the fourth quarter. Bernie alluded to it. It was about 3% of our common capital base. But I think the key message from an issuance perspective is that we will continue to look at our capital markets activities and stock issuance activities from the perspective of our existing shareholders. I think we’ve always done that. We will continue to do that. And what that means is that, for example, we’re not going to issue capital for the sake of getting larger, given AGNC size and scale today, I don’t think that is a relevant benefit, if you will, of issuing capital. But we approach it from the perspective of our existing shareholders saying, is that capital transaction accretive to our existing shareholders.
Obviously, one of the key inputs in that equation is where the book value is versus the stock price at the time that we do the issuance. I know it’s difficult from the markets perspective to know what that is. We look at that on a sort of real-time contemporaneous basis. We did that in the fourth quarter. And when we issue stock from that perspective, we’re issuing it when we believe it is accretive from a book value perspective to our existing shareholders. But there are other considerations that also go into it, and we will continue to emphasize these, for example, leverage is an important consideration from an existing shareholder perspective. From my perspective, we always try to prioritize our leverage decision in the context of our existing shareholders, meaning we want to be operating from an existing shareholder perspective at our desired leverage level.
Once we are at that desired leverage level, we can then think about adding more capital if it’s accretive from a book value and then that leads us to the sort of second question is, can that capital be deployed quickly at the same desired leverage level such that it begins to generate earnings and accrue the same benefits as our existing shareholders’ capital? So that’s important from that perspective. And then the last consideration that I think is really important is the cost of the capital transaction. Obviously, you’ve seen us over the course of 2022, used the ATM program as a source of capital, about, I think, about $500 million €“ $475 million in total over the course of the year. That’s a very cost-effective way. So when we’re looking at that transaction from a price-to-book ratio and from a book value accretion that is very low-cost capital versus some of the other transactions that are possible.
So those are the considerations that we look at. We believe the capital transaction that we did in the fourth quarter was accretive from that perspective. We were able to put those proceeds to work during the fourth quarter. And you can tell from the price of the stock that we raised and if you went back and look at AGNC stock price, you can essentially tell that, that capital was raised around a 3 or 4-week period in October also coincides with where I gave the book value update at the time late in October. So I think when you look at it from a contemporaneous perspective, I think you can conclude that, that was accretive from a book value perspective. But we are always putting the existing shareholders first. We’re not trying to raise capital for the sake of raising capital or the sake of getting larger.
When we raise capital, it’s because we think it’s accretive to our existing shareholders, and we think we can put those proceeds to work quickly at the same desired leverage level as our existing shareholders. So I hope that helps you.
Doug Harter: Absolutely. And just on €“ to clarify or to drill down on one of the points. I guess, how would you characterize your leverage today kind of in that versus what is kind of your target?
