Summary of ANTHRACITE CAPITAL INC

Item 8.01. Other Events.

The Company reported the following results on November 10, 2008:

The Company today reported net income available to common stockholders for the third quarter of 2008 of $0.14 per share, compared to $0.19 per share for the same three-month period in 2007. Net income available to common stockholders for the nine months ended September 30, 2008 was $1.23 per share, compared to $0.94 per share for the same nine-month period in 2007. (All currency amounts discussed herein are in thousands, except share and per share amounts. All per share information is presented on a diluted basis.)

Chris Milner, Chief Executive Officer of the Company, stated, "The market continued to deteriorate during the third quarter as over twelve months of turmoil in the credit markets began to adversely impact both equity markets and the overall economy. This phenomenon was even more pronounced in October with equity markets falling precipitously and the development of a broad consensus that a recession was inevitable in the U.S., if not globally."

Mr. Milner also commented, "On a more positive note, the second half of October showed signs of stabilization in the short-term liquidity markets, primarily as a result of the coordinated efforts of global central banks. While we are optimistic that money markets should continue to improve, much remains to be achieved before we return to normalcy. As this process continues, we expect ongoing credit market challenges will have a significant impact on the economy, tenants and borrowers. In this environment, we continue to focus our attention on the Company's liquidity and credit."

Capital Markets Activity

Credit Facilities:
On July 8, 2008, Deutsche Bank AG, Cayman Islands Branch extended its multicurrency agreement until July 8, 2010 and on August 7, 2008, Bank of America, N.A. extended its U.S. and non-U.S. dollar denominated facilities until September 18, 2010. In connection with the extension of both facilities, certain financial covenants were added or modified to conform to more restrictive covenants contained in other credit facilities.

Common and Preferred Stock Issuances:
For the three months ended September 30, 2008, the Company issued an aggregate of 2,688,493 shares of Common Stock under its sales agency agreement and its Dividend Reinvestment and Stock Purchase Plan. Net proceeds to the Company were $16,155.

Richard Shea, President and Chief Operating Officer of the Company, stated, "We have been actively working with our line lenders to reduce outstanding borrowings and extend maturities. During the quarter, we extended both the Deutsche Bank and Bank of America credit facilities into 2010 and commenced discussions with Morgan Stanley about the extension of our credit facility with them, which matures in February 2009. We are also considering transactions to replace short-term liabilities with longer term non-mark-to-market liabilities, or some form of equity in order to enhance our capital structure."

Mr. Shea also commented, "Managing our credit exposure is increasingly challenging in this weak economic environment. Our credit strategy is to take a balanced approach to asset resolutions, generally favoring loan restructuring over immediate liquidations at substantial discounts. Delinquencies in our CMBS investments continue to rise, as expected, though we believe we are adequately reserved for an even higher delinquency rate. We regularly review our loss assumptions in relation to expected credit performance."

Liquidity

During 2008, the value of credit sensitive securities continued to fall regardless of actual credit performance. As a result, during the period from January 1, 2008 through November 7, 2008, the Company paid $189,352 ($84,733 since July 1, 2008) related to margin calls and contractual amortization payments. Of the $84,733 paid since July 1, 2008, $41,223 represented contractual payments negotiated upon the extension of two of the Company's credit facilities. The Company will fund an additional margin call of approximately $6,600 on November 11, 2008. In addition, the Company has agreed to make increased monthly installment payments to one of its lenders in full satisfaction of a margin call of $11,582 originally scheduled to be paid in October 2008.

In the event of a further reduction in market liquidity, the Company's short-term (one year or less) liquidity needs will be met primarily with $45,810 of unrestricted cash and cash equivalents (of which $21,355 must be retained under the provisions of the Company's financial debt covenants and would not be available to fund operations) held as of September 30, 2008, potential common stock issuances under the Company's sales agency agreement, and $23,624 of unused borrowing capacity from the Company's credit facility with BlackRock HoldCo 2, Inc. (the "BlackRock Facility") as of September 30, 2008. As of October 31, 2008, unused borrowing capacity from the BlackRock Facility declined to $16,835 due to a decline in the fair market value of the shares of Carbon Capital II, Inc. ("Carbon II") that are pledged to secure the BlackRock Facility.

In addition to the covenants under the Company's secured facilities, certain of the Company's seven CDOs contain compliance tests which, if violated, could trigger a diversion of cash flows from the Company to bondholders. The Company's first three CDOs contain certain interest coverage and overcollateralization tests. At September 30, 2008, all such tests are passing by a wide margin. The Company's three CDOs designated as its high yield ("HY") series do not have any compliance tests. The Euro-denominated CDO's ("Euro CDO") most significant test is the weighted average rating test which is affected by credit rating agency downgrades to underlying CDO collateral. The Company can actively manage the Euro CDO collateral pool to facilitate compliance with this test. At September 30, 2008, the Company is meeting all such tests.

Based on current projections of cash for the next twelve months, the Company expects it will have cash resources to pay quarterly cash dividends on its common stock at the current rate for the dividend typically payable in the first quarter of 2009 and, if the Company raises additional capital, obtains additional financing and/or receives cash proceeds from the future sale of assets or asset repayments, thereafter. However, no decision has been made by the Company with respect to the declaration or payment of any future dividend, including the rate or time of declaration and payment of any such dividend. The Company may consider payment of dividends on its common stock all or partially in common stock and intends to continue to comply with REIT dividend requirements.

Third Quarter Financial Summary

· The impact of valuing assets and liabilities under SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities ("FAS 159") was a net gain of $14,375 for the three months ended September 30, 2008. As credit spreads widened during the third quarter, the decrease in the value of the Company's long-term liabilities more than offset the decrease in the value of its CMBS securities.

· Income from commercial real estate securities for the quarter ended September 30, 2008 increased $2,786, or 5.5%, from the quarter ended June 30, 2008. The increase primarily relates to yield adjustments under EITF 99-20 during the third quarter of 2008.

· The Company recorded a provision for loan losses of $18,752 for the three months ended September 30, 2008. The provision relates to two loans with an aggregate principal balance of $65,580.

· Weighted average cost of funds increased to 6.4% for the third quarter of 2008 from 6.1% for the second quarter of 2008.

Commercial Real Estate Securities

The Company considers CMBS where it maintains the right to control the foreclosure/workout process on the underlying loans as controlling class CMBS ("Controlling Class CMBS"). The Company owns Controlling Class CMBS issued in 1998, 1999 and 2001 through 2007.

The Company did not acquire any additional Controlling Class CMBS trusts during the quarter ended September 30, 2008. At September 30, 2008, the Company owned 39 Controlling Class CMBS trusts with an aggregate underlying loan principal balance of $57,724,002. Delinquencies of 30 days or more on these loans as a percent of current loan balances were 0.99% at September 30, 2008, compared with 0.59% at June 30, 2008.

The chart below summarizes the par, weighted average coupon, market value, adjusted purchase price and third quarter 2008 estimated loss assumptions for the Company's U.S. dollar denominated Controlling Class CMBS:

                                                                                           Estimated
                               Weighted Average                          Adjusted         Collateral
  Vintage          Par              Coupon           Market Value     Purchase Price        Losses
   1998        $    261,266                  6.2 %  $      212,249    $      208,897    $        60,074
   1999               7,604                  6.9 %           6,944             6,944              2,956
   2001              34,790                  6.1 %          27,548            27,388             13,610
   2002               2,300                  5.7 %           1,843             2,258             10,064
   2003              78,209                  4.9 %          49,763            52,741             36,628
   2004              75,445                  5.1 %          35,656            47,381            120,939
   2005             234,207                  5.0 %          65,187           115,203            133,477
   2006             421,066                  5.2 %          79,746            94,279            179,798
   2007             649,400                  5.2 %         110,340           138,506            291,652
   Total       $  1,764,287                  5.3 %  $      589,276    $      693,597    $       849,198

During the three months ended September 30, 2008, one of the Company's Controlling Class CMBS was upgraded by at least one rating agency and fifteen securities in four Controlling Class CMBS were downgraded. Additionally, at least one rating agency upgraded five of the Company's non-Controlling Class commercial real estate securities and downgraded four.

Commercial Real Estate Loans

The Company recorded a provision for loan losses of $18,752 for the three months ended September 30, 2008. This provision relates to two loans with an aggregate principal balance of $65,580. The first is a $20,500 mezzanine loan secured by a 1,802 unit apartment complex located in New York City which required a provision totaling $5,000. The second loan is a €32,094 ($45,080) junior mezzanine loan secured by a portfolio of office buildings in the Netherlands which required a provision totaling €9,790 ($13,752). The collateral for both loans is not performing to expectations and negotiations are underway to restructure the loans. Due to the estimated reduction in value of the underlying collateral below the principal balances of the loans at September 30, 2008, the Company believes an $18,752 loan loss reserve is appropriate. At September 30, 2008, all other commercial real estate loans owned directly by the Company are performing according to their terms or have been appropriately reserved.

Earnings from Equity Investments

Also included in commercial real estate loans are the Company's investments in Carbon Capital, Inc. ("Carbon I") and Carbon II (collectively with Carbon I, the "Carbon Capital Funds"), which are managed by the Company's manager. For the quarters ended September 30, 2008 and 2007, the Company recorded income from the Carbon Capital Funds of $1,972 and $2,222, respectively. Paydowns in Carbon Capital Funds during the third quarter totaled $27,763. The investment periods for the Carbon Capital Funds have expired and no new portfolio additions are expected.

The Company's investments in the Carbon Capital Funds were as follows:

             September 30, 2008     December 31, 2007
Carbon I    $              1,711   $             1,636
Carbon II                 95,928                97,762
            $             97,639   $            99,398

As previously reported, five loans held in the Carbon Capital Funds are in various stages of resolution and the Carbon Capital Funds have established loan loss reserves as necessary.

During the third quarter of 2008, a first mortgage secured by a property in New York City defaulted. Carbon II is exploring its alternatives including a foreclosure of the real estate. Carbon II believes a loan loss reserve is not necessary at September 30, 2008. All other commercial real estate loans held through the Company's investments in the Carbon Capital Funds are performing in accordance with their terms or have been appropriately reserved as of September 30, 2008. All financial information utilized in this press release with respect to the Carbon Capital Funds was reported to the Company by the Carbon Capital Funds.

On June 26, 2008, the Company invested $30,886 in RECP Anthracite International JV Limited ("AHR International JV"). AHR International JV invests in investments backed by non-U.S. real estate assets. The Company will invest on a deal-by-deal basis and has no committed capital obligation. The Company is utilizing the . . .