Annaly Capital Management Inc. (NYSE: NLY) has now announced that it intends to conduct a public offering of shares of an original issuance of Series D Cumulative Redeemable Preferred Stock. The preferred issue will come with a liquidation preference price of $25.00 per share.
Today’s preferred share sale will be led by Morgan Stanley, BofA/Merrill Lynch, UBS Securities, J.P. Morgan Securities and RBC Capital Markets as the joint book-running managers for the offering. Co-managers are listed as Barclays Capital, Credit Suisse Securities, Deutsche Bank Securities and Stifel Nicolaus & Company.
Annaly said that it expects to use the proceeds of this offering “to purchase mortgage-backed securities for its investment portfolio and for general corporate purposes, which may include the retirement of its long-term indebtedness, additional investments and repayment of short term indebtedness.”
In a separate release, Annaly said that it has repurchased $280.7 million of its outstanding $600 million in 4% senior convertible notes. The aim is to lengthen its debt maturity schedule and to lower the borrowing costs.
Why this offering matters is that Annaly is one of the top mortgage-REITs out there and its current implied dividend is about 12.6%. With a $17 billion market cap and a share price of $17.53, the 52-week range is $14.65 to $18.28.
JON C. OGG
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