Annaly Takes Lumps on New Stock Offering

Annaly Capital Management, Inc. (NYSE: NLY) dropped Friday, after reporting a 65-million share offering of common stock.
The New York-based company announced in a release the offering for expected gross proceeds of approximately $780 million before deducting estimated offering expenses. The offering is subject to customary closing conditions and is expected to close on or about next Wednesday.
In connection with the offering, Annaly has granted the underwriters a 30-day option to purchase up to an additional 9,750,000 shares of common stock.
Annaly intends to use the net proceeds of this offering to acquire targeted assets under the Company’s capital allocation policy, which may include further diversification of its investments in Agency assets as well as residential, commercial and corporate credit assets.
These investments include, without limitation, residential credit assets (including residential mortgage loans), middle market corporate debt, Agency MBS pools, to-be-announced forward contracts, adjustable rate mortgages, commercial real estate loans and securities and mortgage servicing rights.
The release goes on to say Annaly also intends to use the net proceeds for general corporate purposes, including, without limitation, to pay down obligations and other working capital items.
Credit Suisse, BofA Merrill Lynch, Goldman Sachs & Co. LLC and Wells Fargo Securities are acting as joint book-running managers for the offering.
Annaly is a leading diversified capital manager that invests in and finances residential and commercial assets.

Shares in the company ducked 28 cents, or 2.3%, to $12.10, within a 52-week trading range of $9.83 to $12.73.