Anworth Mortgage Asset (ANH)

Item 1.01. Entry into a Material Definitive Agreement.

On March 15, 2005, Anworth Mortgage Asset Corporation (“Anworth”) announced that it had completed the sale of $36,250,000 of trust preferred securities (the “Securities”) through a newly-formed statutory trust, Anworth Capital Trust I, organized under Delaware law (the “Trust”). The sales of the Securities were made pursuant to a Purchase Agreement dated as of March 15, 2005 by and among Anworth, the Trust, TABERNA Preferred Funding I, Ltd., and Merrill Lynch International (the “Purchase Agreement”). The Securities will require quarterly distributions and bear interest at the prevailing three-month LIBOR rate plus 3.10%. The Securities will mature in 2035 and will be redeemable, in whole or in part, without penalty, at the option of Anworth after five years. Anworth intends to use the net proceeds of this private placement for general corporate purposes and to invest in agency mortgage-backed securities

Copies of the (1) form of stock certificate evidencing the Trust Floating Rate Preferred Securities (liquidation amount $1,000 per Preferred Security), (2) form of stock certificate evidencing the Trust Floating Rate Common Securities (liquidation amount $1,000 per Common Security), (3) form of note evidencing the Anworth Floating Rate Junior Subordinated Note Due 2035, (4) Junior Subordinated Indenture, (5) Purchase Agreement and (6) Amended and Restated Trust Agreement, are attached as Exhibits 4.1, 4.2, 4.3, 4.4, 10.1 and 10.2, respectively, to this Current Report on Form 8-K, and are incorporated by reference herein.

A copy of the press release announcing the sale of the Securities and the transactions contemplated therewith, publicly released on March 15, 2005, is attached as Exhibit 99.1.