Annaly Note Offering to Be Used, in Part, for MBS Buys

Agency mortgage-backed securities investor Annaly Capital Management Inc. has priced a public offering of $500 million in an aggregate principal amount of its 4% convertible senior notes due 2015 and plans to use the proceeds, in part, to buy MBS for its investment portfolio. The company said it would also use the proceeds for general corporate purchases. It estimated net proceeds of about $485 million after deducting underwriting discounts and expected offering expenses. The offering is slated to close Friday. Interest on the notes is set to be paid semi-annually at a rate of 4% per year with the notes maturing on Feb. 15, 2015 unless they are repurchased or converted earlier. The notes will be convertible into shares of Annaly's common stock at an initial conversion rate of roughly 46.6 shares per $1,000 principal amount of notes. This is equal to about $21.46 per share of common stock, subject to adjustment in certain circumstances. Credit Suisse Securities (USA) LLC is the sole underwriter for the offering.