Annaly Capital Management, Inc. Comments on Its Proposal to Acquire CreXus
NEW YORK -- November 12, 2012
Wellington Denahan, Chairman and Chief Executive Officer of Annaly Capital
Management, Inc. (NYSE: NLY) (“Annaly” or the “Company”), made the following
statement regarding Annaly's proposal, announced today, to acquire the shares
of CreXus Investment Corp. that Annaly does not already own:
“Since our inception in 1997, Annaly has maintained the capacity to diversify
its asset base to include real estate related assets in addition to Agency
mortgage-backed securities if we determined that compelling other long-term
investment opportunities exist relative to the Agency market. While we remain
committed to the Agency market, given the current environment, we believe it
is prudent to diversify a portion of our investment portfolio. Therefore, we
may allocate up to 25% of our shareholders’ equity to real estate assets other
than Agency mortgage-backed securities.
“A powerful step in this direction is the proposed acquisition of CreXus. We
believe that wholly owning the commercial real estate platform we currently
manage through FIDAC is complementary to our existing business and return
profile and should provide stable and diversified risk-adjusted returns to our
shareholders. CreXus’ capabilities and growth may be significantly enhanced
when coupled with Annaly’s broad capital base.
“Our commercial real estate expertise, as well as our expertise in a number of
other asset classes, are valuable strategic tools, and we look forward to
updating the market on our portfolio as it evolves.
“This proposed transaction would be part of a broad evolution of our capital
allocation strategy. Over the last 12 months, we have taken the following
*Lowering our cost of capital by issuing $1.5 billion of preferred equity
and convertible notes at a weighted average rate of 6.3%
*Extending the duration of our borrowings at September 30, 2012 to 220 days
from 127 days at March 31, 2012
*Restructuring capital by repurchasing $447.1 million of convertible notes
*Announcing an up to $1.5 billion common stock repurchase program.”
About Annaly Capital Management, Inc.
Annaly’s principal business objective is to generate net income for
distribution to investors from its investment securities and from dividends it
receives from its subsidiaries. Annaly is a Maryland corporation that has
elected to be taxed as a real estate investment trust (“REIT”).
This news release and our public documents to which we refer contain or
incorporate by reference certain forward-looking statements which are based on
various assumptions (some of which are beyond our control) may be identified
by reference to a future period or periods or by the use of forward-looking
terminology, such as "may," "will," "believe," "expect," "anticipate,"
"continue," or similar terms or variations on those terms or the negative of
those terms. Actual results could differ materially from those set forth in
forward-looking statements due to a variety of factors, including, but not
limited to, changes in interest rates; changes in the yield curve; changes in
prepayment rates; the availability of mortgage-backed securities for purchase;
the availability of financing and, if available, the terms of any financings;
changes in the market value of our assets; changes in business conditions and
the general economy; our ability to integrate the commercial mortgage
business; our ability to consummate any contemplated investment opportunities;
risks associated with the businesses of our subsidiaries, including the
investment advisory business of our wholly-owned subsidiaries, including: the
removal by clients of assets managed, their regulatory requirements, and
competition in the investment advisory business; risks associated with the
broker-dealer business of our wholly-owned subsidiary; changes in government
regulations affecting our business; our ability to maintain our qualification
as a REIT for federal income tax purposes; and our ability to maintain our
exemption from registration under the Investment Company Act of 1940, as
amended. For a discussion of the risks and uncertainties which could cause
actual results to differ from those contained in the forward-looking
statements, see "Risk Factors" in our most recent Annual Report on Form 10-K
and any subsequent Quarterly Reports on Form 10-Q. We do not undertake, and
specifically disclaim any obligation, to publicly release the result of any
revisions which may be made to any forward-looking statements to reflect the
occurrence of anticipated or unanticipated events or circumstances after the
date of such statements.
Annaly Capital Management, Inc.
Investor Relations, 888-8Annaly
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