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

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

Business Wire

DALLAS -- May 16, 2013

Capstead Mortgage Corporation (NYSE: CMO) (“Capstead” or the “Company”) today
announced the completion of its public offering for 6,800,000 shares of 7.50%
Series E Cumulative Redeemable Preferred Stock, liquidation preference $25.00
per share (the “Series E Preferred Stock”), including an additional 800,000
shares of Series E Preferred Stock pursuant to the underwriters’ partial
exercise of their 900,000 share overallotment option. The offering produced
gross proceeds of $170 million, before deducting the underwriting discount and
estimated offering expenses. The Company’s Series E Preferred Stock will be
listed on the NYSE under the symbol “CMOPRE.”

Capstead intends to use the net proceeds from this offering, together with
cash on hand, to fund the June 13, 2013 redemption of its outstanding $1.26
Cumulative Convertible Preferred Stock, Series B (the “Series B Preferred
Stock”). The Company also has announced that on June 13, 2013 it will redeem
any shares of its outstanding $1.60 Cumulative Convertible Preferred Stock,
Series A that do not convert into shares of the Company’s common stock on or
before June 6, 2013, after which time the right to convert permanently
expires. Although the Series B Preferred Stock also is convertible on or
before June 6, 2013, it is not considered economically advantageous for
holders of the Series B Preferred Stock to convert their shares and few, if
any, Series B Preferred Stock conversions are expected. See separate
announcements and redemption notices issued by the Company on May 13, 2013
regarding these redemptions for more information.

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

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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