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CreXus Investment Corp. Signs Definitive Agreement to be Acquired by Annaly Capital Management for $13.00 Per Share

  CreXus Investment Corp. Signs Definitive Agreement to be Acquired by Annaly
  Capital Management for $13.00 Per Share

        Implied Total Transaction Value of Approximately $1.0 Billion

Business Wire

NEW YORK -- January 31, 2013

CreXus Investment Corp. (NYSE: CXS) (the “Company”) announced today that it
has entered into a definitive merger agreement pursuant to which Annaly
Capital Management, Inc. (NYSE: NLY) (“Annaly”) will acquire all of the
outstanding shares of common stock of the Company not currently owned by
Annaly for $13.00 per share in cash. The transaction, which is structured as a
tender offer followed by a merger, has been approved by the Company’s board of
directors upon the unanimous recommendation and approval of a Special
Committee consisting of the Company’s three independent directors.

The $13.00 per share price represents a 17.1% premium to the Company’s
unaffected share price on November 9, 2013, the trading day prior to Annaly
first announcing its interest in acquiring the Company, and a 4.0% premium to
Annaly’s original proposed price of $12.50 per share. The transaction
represents a fully diluted equity value for the Company of approximately
$1.0billion.

The Company expects to declare and pay regular quarterly dividends while the
transaction is pending. In addition, at the time the tender offer is
completed, Annaly will increase the cash purchase price per share to reflect a
pro-rated quarterly dividend for the quarter in which the tender offer is
closed.

Under the terms of the agreement, the Company may solicit, receive, evaluate
and enter into negotiations with respect to alternative proposals from third
parties for a period of 45 calendar days continuing through March 16, 2013.
The Special Committee, with the assistance of its independent advisors, will
actively solicit alternative proposals during this period. The Company does
not intend to disclose developments during this process, unless it determines
that there is a need to update the market, and there can be no assurance that
this process will result in receipt of a superior offer or that any other
transaction will be approved or consummated. Annaly has agreed to not purchase
shares of Company common stock in excess of the approximately 12.4% of the
outstanding that it currently owns.

At the conclusion of the 45-day active solicitation period, a subsidiary of
Annaly will commence a cash tender offer for all of the outstanding shares of
Company common stock not already owned by Annaly and its subsidiaries for
$13.00 per share, plus a pro-rated quarterly dividend through the end of the
tender offer period. The tender offer will be conditioned upon, among other
things, satisfaction of a minimum tender of 51% of the outstanding shares of
Company common stock not owned Annaly, any of its subsidiaries, officers or
directors, and other customary conditions. If the tender offer is successfully
completed, it will be followed by a cash merger in which any remaining
outstanding shares of Company common stock will be converted into the right to
receive the same cash consideration per share as paid in the tender offer. The
Company currently expects the tender offer to expire in mid-April 2013, and
the merger to close as soon as practicable thereafter.

Nancy Jo Kuenstner, chairman of the Special Committee, said, “The Special
Committee is very pleased to have reached a definitive agreement with Annaly
that we believe provides compelling value to CreXus stockholders. We also look
forward to exploring what alternatives might be available to us during the
“go-shop” period, as permitted by the terms of our agreement.”

Lazard is acting as independent financial advisor and Goodwin Procter LLP is
acting as independent legal advisor to the Special Committee in connection
with this transaction. Bank of America Merrill Lynch is acting as financial
advisor and K&L Gates LLP is acting as legal advisor to Annaly.

About CreXus Investment Corp.

CreXus acquires, manages and finances, directly or through its subsidiaries,
commercial mortgage loans and other commercial real estate debt, commercial
real property, commercial mortgage-backed securities and other commercial and
residential real estate-related assets. The Company’s principal business
objective is to generate net income for distribution to investors from the
spread between the yields on its investments and the cost of borrowing to
finance their acquisition and secondarily to provide capital appreciation. The
Company, a Maryland corporation that has elected to be taxed as a real estate
investment trust (“REIT”), is externally managed by Fixed Income Discount
Advisory Company, a wholly owned subsidiary of Annaly Capital Management, Inc.

Additional Information and Where to Find It

The tender offer for the outstanding common stock of the Company referred to
in this press release has not yet commenced. This press release is neither an
offer to purchase nor a solicitation of an offer to sell any securities. The
solicitation and the offer to buy shares of Company common stock will be made
pursuant to an offer to purchase and related materials that an affiliate of
Annaly Capital Management, Inc. intends to file with the Securities and
Exchange Commission (“SEC”). At the time the offer is commenced, Annaly’s
subsidiary will file a tender offer statement on Schedule TO with the SEC, and
thereafter the Company will file a solicitation/recommendation statement on
Schedule 14D-9 with respect to the offer. The tender offer statement
(including an offer to purchase, a related letter of transmittal and other
offer documents) and the solicitation/recommendation statement will contain
important information that should be read carefully and considered before any
decision is made with respect to the tender offer. These materials will be
sent free of charge to all stockholders of the Company when available. In
addition, all of these materials (and all other materials filed by the Company
with the SEC) will be available at no charge from the Securities and Exchange
Commission through its website at www.sec.gov. Free copies of the offer to
purchase, the related letter of transmittal and certain other offering
documents will be made available by Annaly when available. Investors and
security holders may also obtain free copies of the documents filed with the
SEC by the Company by contacting Investor Relations at 646-829-0159.

Forward Looking Statements

This press release contains forward-looking statements relating to the
potential acquisition of CreXus Investment Corp. by a subsidiary of Annaly
Capital Management, Inc., including the expected date of closing and the
potential benefits of the transaction. These are forward-looking statements
for purposes of the safe harbor provisions under the Private Securities
Litigation Reform Act of 1995. Actual results may differ materially from those
currently anticipated due to a number of risks and uncertainties. Risks and
uncertainties that could cause the actual results to differ from expectations
contemplated by any forward looking statements in this press release include:
uncertainties as to the timing of the tender offer and merger; uncertainties
as to how many of the Company stockholders will tender their stock in the
offer; the possibility that competing offers will be made; the possibility
that various closing conditions for the transaction may not be satisfied or
waived, including that a governmental entity may prohibit, delay or refuse to
grant approval for the consummation of the transaction; transaction costs;
actual or contingent liabilities; and other risks and uncertainties discussed
in the documents we file from time to time with the SEC, including our annual
report on Form 10-K for the year ended December31, 2011 and quarterly and
current reports on Form 10-Q and 8-K. These forward-looking statements reflect
CreXus’ expectations as of the date of this press release. CreXus undertakes
no obligation to update the information provided herein other than as required
by law.

Contact:

CreXus Investment Corp.
Investor Relations, 646-829-0159
www.crexusinvestment.com
 
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