Dynex Capital, Inc. Announces TALF Subscription

Dynex Capital, Inc. (NYSE: DX) announced today that it funded $45.8 million in ‘AAA’-rated CMBS issued in 2004 and 2005 that it purchased in March through the Term Asset Backed Securities Loan Facility, or TALF, program administered by the New York Federal Reserve. The Company borrowed $38.0 million for three years under the TALF program at a rate of 2.72%. With the completion of the March TALF financing, the Federal Reserve has now concluded its financing program with respect to legacy CMBS. In total, under the TALF CMBS program, the Company financed $60.8 million in ‘AAA’-rated CMBS issued in 2004 and 2005 with $50.8 million in three-year funding at a weighted average rate of 2.73% and an estimated leveraged return on invested capital of 14%.

Mr. Thomas Akin, Chairman and Chief Executive Officer of the Company commented, "We continue to execute on our strategy of adding high-quality assets to our investment portfolio at attractive risk adjusted returns. We are quite pleased with the credit profile of the CMBS and the TALF funding allows us to finance these assets on a non-recourse and non mark-to-market basis for three years. We believe that there will continue to be attractive investment opportunities across the RMBS and CMBS markets, both Agency and non-Agency, for 2010 at excellent leveraged risk-adjusted returns on our capital.”

Dynex Capital, Inc. is a real estate investment trust, or REIT, which invests in mortgage loans and securities on a leveraged basis. The Company invests in Agency and non-Agency RMBS, and CMBS. The Company also has investments in securitized single-family residential and commercial mortgage loans originated by the Company from 1992 to 1998. Additional information about Dynex Capital, Inc. is available at www.dynexcapital.com.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding the business of Dynex Capital, Inc. that are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of these risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report on Form 10-K and other reports filed with the Securities and Exchange Commission.