Capstead Mortgage Corporation Prices Public Offering of 7.50% Series E Cumulative Redeemable Preferred Stock

  Capstead Mortgage Corporation Prices Public Offering of 7.50% Series E
  Cumulative Redeemable Preferred Stock

Business Wire

DALLAS -- May 8, 2013

Capstead Mortgage Corporation (NYSE: CMO) (“Capstead” or the “Company”)
announced that it priced an underwritten public offering of 6 million shares
of its 7.50% Series E Cumulative Redeemable Preferred Stock (the “7.50% Series
E Preferred Stock”), liquidation preference $25.00 per share, for gross
proceeds of $150 million, before deducting the underwriting discount and
estimated offering expenses.

The Company has granted the underwriters a 30-day option to purchase up to
900,000 additional shares of 7.50% Series E Preferred Stock to cover
over-allotments, if any. The offering is subject to customary closing
conditions and is expected to close on or about May 13, 2013.

Capstead intends to use the net proceeds from this offering, together with
cash on hand as necessary and deemed prudent, to redeem all or a portion of
the Company’s outstanding Series A Preferred Stock and Series B Preferred
Stock. Should the Company conclude not to use all or a portion of the net
proceeds from this offering to fund a redemption transaction, such proceeds
will be used for general corporate purposes.

Morgan Stanley & Co. LLC and UBS Securities LLC are serving as joint
book-running managers on the offering. Keefe, Bruyette & Woods, Inc. and RBC
Capital Markets, LLC are serving as joint lead managers. JMP Securities LLC
and Mitsubishi UFJ Securities (USA), Inc. are serving as co-managers.

The offering is being made pursuant to the Company’s existing shelf
registration statement previously filed with the Securities and Exchange
Commission that became effective upon filing. This press release is neither an
offer to sell nor a solicitation of an offer to buy shares of 7.50% Series E
Preferred Stock. The offering of these securities will be made only by means
of a prospectus and related prospectus supplement, a copy of which may be
obtained by contacting:

Morgan Stanley & Co. LLC
Attention: Prospectus Department
1585 Broadway
New York, NY 10036
Email: prospectus@morganstanley.com
Telephone: (866) 718-1649

UBS Securities LLC
Attention: Prospectus Department
299 Park Avenue
New York, NY 10171
Telephone: (877) 827-6444, ext. 561-3884

The prospectus supplement and the accompanying prospectus shall not constitute
an offer to sell or the solicitation of an offer to buy, nor shall there be
any sale of these securities in any state in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under the
securities laws of any such state.

Capstead is a self-managed real estate investment trust (a “REIT”) for federal
income tax purposes. The Company earns income from investing in a leveraged
portfolio of residential adjustable-rate mortgage pass-through securities,
referred to as ARM securities, issued and guaranteed by government-sponsored
enterprises, either Fannie Mae or Freddie Mac, or by an agency of the federal
government, Ginnie Mae.

            Cautionary Note Concerning Forward-looking Statements

This document contains “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking statements
include, without limitation, any statement that may predict, forecast,
indicate or imply future results, performance or achievements, and may contain
the words “believe,” “anticipate,” “expect,” “estimate,” “intend,” “will be,”
“will likely continue,” “will likely result,” or words or phrases of similar
meaning. Forward-looking statements are based largely on the expectations of
management and are subject to a number of risks and uncertainties including,
but not limited to, the following:

  *the Company’s expectations around the use of proceeds of this offering and
    the redemption of the Series A Preferred Stock and Series B Preferred
    Stock;
  *changes in general economic conditions;
  *fluctuations in interest rates and levels of mortgage prepayments;
  *the effectiveness of risk management strategies;
  *the impact of differing levels of leverage employed;
  *liquidity of secondary markets and credit markets;
  *the availability of financing at reasonable levels and terms to support
    investing on a leveraged basis;
  *the availability of new investment capital;
  *the availability of suitable qualifying investments from both an
    investment return and regulatory perspective;
  *changes in legislation or regulation affecting exemptions for mortgage
    REITs from regulation under the Investment Company Act of 1940;
  *changes in legislation or regulation affecting Fannie Mae, Freddie Mac,
    Ginnie Mae and similar federal government agencies and related guarantees;
  *deterioration in credit quality and ratings of existing or future
    issuances of mortgage securities guaranteed by Fannie Mae, Freddie Mac or
    Ginnie Mae; and
  *increases in costs and other general competitive factors.

In addition to the above considerations, actual results and liquidity are
affected by other risks and uncertainties which could cause actual results to
be significantly different from those expressed or implied by any
forward-looking statements included herein. It is not possible to identify all
of the risks, uncertainties and other factors that may affect future results.
In light of these risks and uncertainties, the forward-looking events and
circumstances discussed herein may not occur and actual results could differ
materially from those anticipated or implied in the forward-looking
statements. Forward-looking statements speak only as of the date the statement
is made and the Company undertakes no obligation to update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.

Contact:

Capstead Mortgage Corporation
Investor Relations:
Lindsey Crabbe, 214-874-2339
 
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