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Investors back away from leveraged RE bets

These investors are the smart ones.

Investors Back Away From Leveraged RE Bets

Jul. 11 2011 - 11:24 am | 1,214 views | 0 recommendations | 0 comments

By ETFCHANNEL.COM

Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the Proshares Ultra Real Estate (URE) where we have detected an approximate $14.6 million dollar outflow — that’s a 2.7% decrease week over week (from 8,429,372 to 8,204,372). Among the largest underlying components of URE, in trading today American Campus Communities (ACC) is off about 1.3%, and American Capital Agency (AGNC) is lower by about 1%. For a complete list of holdings, visit the URE Holdings page »

The chart below shows the one year price performance of URE, versus its 200 day moving average:

Looking at the chart above, URE’s low point in its 52 week range is $35.44 per share, with $65.20 as the 52 week high point — that compares with a last trade of $62.55. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique — learn more about the 200 day moving average ».


Exchange traded funds (ETFs) trade just like stocks, but instead of ”shares” investors are actually buying and selling ”units”. These ”units” can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.

http://blogs.forbes.com/etfchannel/2011/07/11/investors-back-away-from-leveraged-re-bets/

Disclosure: I don’t own AGNC.

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Warning: Annaly Capital Management (NLY) announces pricing of public offering of common stock.

Another day, another public offering of common stock by a leveraged REIT.  These companies including NLY, AGNC, and a few other high dividend stocks offer new shares to bring in money.  They use the money to leverage the purchase of 6x-9x more agency securities (back by the full faith and credit of the US govt – hahaha!!).  The people who run these companies are paid for the amount of equity they accumulate; shareholders do not come first.

Keynesian economics says deficits don’t matter.  They do.  The Greek government is learning this lesson the hard way.  When interest rates rise in the US for the same reasons these high yielding stocks will tank.  Until then they will pay high dividends.  Just know that there are significant risk with these stocks.

NLY has little earning power and a horrible balance sheet.

Disclosure: I don’t own NLY or AGNC.

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press release

July 11, 2011, 7:06 p.m. EDT

Annaly Capital Management Announces Pricing of Public Offering of Common Stock

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NEW YORK, Jul 11, 2011 (BUSINESS WIRE) -- Annaly Capital Management, Inc. /quotes/zigman/189739/quotes/nls/nly NLY -2.29% today announced the pricing of an underwritten public offering of 120,000,000 shares of its common stock at a price per share of $17.70 for expected gross proceeds of approximately $2.1 billion before expenses.

Annaly has also granted the underwriters a thirty-day option to purchase up to an additional 18,000,000 shares of common stock solely to cover overallotments. Annaly 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 additional investments and repayment of short-term indebtedness.

Credit Suisse Securities (USA) LLC is acting as the lead book-running manager for the offering. BofA Merrill Lynch, Morgan Stanley, UBS Investment Bank and RCap Securities, Inc. are acting as joint book-running managers.

Annaly has filed a shelf registration statement and prospectus with the Securities and Exchange Commission (SEC), and will file a prospectus supplement for the offering to which this communication relates. Before you invest, you should read the prospectus supplement and the accompanying prospectus and other documents Annaly has filed with the SEC for more complete information about Annaly and this offering. You may obtain these documents for free by visiting EDGAR on the SEC Web site at http://www.sec.gov . Alternatively, Annaly, the underwriters or any dealer participating in the offering will arrange to send you the prospectus supplement and accompanying prospectus if you request them by contacting:

Link to the original press release http://www.marketwatch.com/story/annaly-capital-management-announces-pricing-of-public-offering-of-common-stock-2011-07-11?reflink=MW_news_stmp

TIP OF THE WEEK - The Usefulness of Bollinger Bands

The Usefulness of Bollinger Bands

Jason Brizic

June 8, 2011

Bollinger Bands are a technical trading tool created by John Bollinger in the early 1980s. They arose from the need for adaptive trading bands and the observation that volatility was dynamic, not static as was widely believed at the time.

The purpose of Bollinger Bands is to provide a relative definition of high and low. By definition prices are high at the upper band and low at the lower band. This definition can aid in rigorous pattern recognition and is useful in comparing price action to the action of indicators to arrive at systematic trading decisions.

Bollinger Bands consist of a set of three curves drawn in relation to securities prices. The middle band is a measure of the intermediate-term trend, usually a simple moving average, that serves as the base for the upper band and lower band. The interval between the upper and lower bands and the middle band is determined by volatility, typically the standard deviation of the same data that were used for the average. The default parameters, 20 periods and two standard deviations, may be adjusted to suit your purposes.

You can use Bollinger Bands to help you time your purchase of high dividend stocks, commodities, and contrarian stocks.  Price bottoms tend to occur when the stock price lifts off the long downward slide down the lower band.  Price tops tend to occur when the stock price falls from hitting its head on the top of the upper band.  I use the MACD and CCI in conjunction with the Bollinger Bands to confirm a top or bottom because just using the Bollinger Band alone can get you burned (the UNG example below).

I use Bollinger Bands when I create free charts on www.stockcharts.com.

Here are the steps I take to setup my charts in less than 10 seconds:

  1. Leave the Type of chart: set to SharpChart.
  2. Type in the ticker symbol and click Go.
  3. Change the Period to Weekly.
  4. Scroll down to Chart Attributes; change Size to Landscape.
  5. Check the following checkboxes: Full Quote, Price Labels,
  6. Uncheck the Log Scale checkbox.
  7. Scroll down to the Overlays area.  Change the one that says –None- to Bollinger Bands
  8. Scroll down to the Indicators area.  Change the one that says RSI to CCI

I discovered the usefulness of Bollinger Bands when I tried to time the recent bottom in the gold price back in 2008  Here is the 3 year gold price chart:

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http://stockcharts.com/h-sc/ui?s=$GOLD&p=W&b=5&g=0&id=p99091791121

When was the best time to buy gold on this chart? $681 in late October 2008.  What happened right after that point?  The price lifted off the bottom Bollinger Band.  The CCI was deep in the red and the MACD turned upward from negative territory.  Those confirmed the bottom.  I bought at $820.

The natural gas ETF trading as UNG provides a good example of how the solely relying on the Bollinger Bands alone can trick you into buying too high.  Look at this chart:

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http://stockcharts.com/h-sc/ui?s=UNG&p=W&b=5&g=0&id=p99958479096

Wow!  This fund has lost a lot of money.  The price of UNG lifted off the bottom Bollinger Band many times, but never enough to bust through the middle band.  The CCI and MACD indicators were good at around March 2009, but the price didn’t break through the middle BB.  Knowing the fundamentals of UNG were horrible was enough to stay away from the fund.  However, just carefully examining the technicals was also enough.

I use the fundamentals to decide to buy or sell.  Then I use the technicals to time my entry or exit.  I will write about the CCI and MACD in upcoming tips of the week.

The fundamentals of Safe Bulkers were strong during the big market crash of 2008-2009.  You could have used Bollinger Bands to get this gem at around $3.00 per share.

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http://stockcharts.com/h-sc/ui?s=SB&p=W&b=5&g=0&id=p24023572905

For more tips, go here:

http://www.myhighdividendstocks.com/category/tip-of-the-week

DryShips (DRYS) earns an upgrade. Why?

I read a short post on shipping upgrades and downgrades.  Here is the short post:

Shares of dry bulk shipping firm DryShips (DRYS) are soaring 3% after the stock earned its second upgrade this week. Sterne Agee raised its rating on the stock to “buy” from “neutral” with a $6 price target, which is more than 50% above where the shares currently trade. The research firm said the coming spin-off of the DryShips ocean rig unit could unlock value for shareholders.

The news isn’t doing much to help the fortunes of the Dry Bulk Shipping Stocks Index, which is down 1%. Earlier this week, Wells Fargo upgraded DryShips to “outperform” from “market perform” with a price target range of $5-$6.

Shares of Diana Shipping (DSX) are tumbling 5% on news of a Credit Suisse downgrade. The bank pared its rating on Diana to “underperform” from “outperform,” saying it expects supply to outpace demand in the dry bulk shipping market. The bank slashed its price target on Diana to $8 from $15 and the new price target is more than 25% below where the stock currently trades.

Looking at other Index members, Safe Bulkers (SB) is up 1% while Navios Maritime Holdings (NM) is up about half a percent. Eagle Bulk Shipping (EGLE) and Excel Maritime Carriers (EXM) are both lower by 1%.

Investors can track the Dry Bulk Shipping Stocks Index for performance trends and a suite of other metrics at tickerspy.com.

I like Safe Bulkers, but I like to check out the competition.  So I decided to take a quick look at DryShips.  Here is what I found.

DryShips (DRYS)

Market price: $4.20

Shares: 399.14 million

Market capitalization: $1.68 billion

Dividend record: no dividend since 2008.  The dividend was cut entirely in 2009.

Earning power: $0.16 average earnings @ 399.14 million shares

Recent EPS: $0.63

(earning adjusted for changes in capitalization; massive issuance of new shares since 2006)

            EPS       Net inc.             Adj. EPS

2006     $1.75    $57 M                $0.14

2007     $13.40  $478 M              $1.22

2008     ($8.11) ($361 M)           ($0.90)

2009     ($0.13) ($27 M)             ($0.07)

2010     $0.61    $173 M              $0.43

Five year average EPS is $0.16

Value price territory below 12 times average earnings = $1.97

Speculative price territory above 20 times average earnings = $3.20

DRYS trades at 26.25 times average earnings.  This is very speculative.

Balance sheet: Improving, mostly from issuance of new stock equities

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Book value per share: $10.43

Price to book value: 0.40 (this is very good)

Current ratio: 0.72 (over 2.0 is good)

Quick ratio: 0.24 (over 1.0 is good)

Conclusion: no dividend, puny earning power, and a balance sheet based on stock issuance.  No thanks.  Chose the high dividend stocks Safe Bulkers instead.

Disclosure: I don’t own DryShips (DRYS) or Safe Bulkers (SB), but I want to own SB.

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PIMCO enters the mortgage REIT business.

PIMCO is getting into the mortgage REIT business. 

http://www.bloomberg.com/news/2011-07-05/pimco-reit-agrees-to-slash-fee-if-residential-mortgage-fund-loses-money.html

What is its unique selling proposition?  In other words, why would I want to invest in PIMCO’s REIT instead of Annaly Capital (NLY) or American Capital Agency Corp. (AGNC)?

The trouble with these mortgage REITs is that the management is compensated for the size of their shareholder equity.  Offering additional shares is the easiest, fastest way to grow their equity through the use of 6x-8x leverage.

Avoid the mortgage REITs if you are a long term investor.  Traders can make some money before these REITs implode due to rising interest rates.

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Strattman: Government Bonds Not Safe

Stattman: Government Bonds Not Safe

Government bonds aren't the risk-free investments they once were, while stocks have better reward potential right now, says Dennis Stattman of BlackRock.

http://news.morningstar.com/articlenet/article.aspx?id=385155

No duh!!  Buy high dividend stocks instead.  Safe Bulkers (SB) is an excellent high dividend stock.

Disclosure: I don’t own Safe Bulkers (SB) right now, but I’d like to.

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Bigger than Verizon and sporting an 8.87% dividend yield

AT&T and Verizon are not the only large telecom companies with high dividends.  Telefonica S.A. is a high dividend stock yielding 8.87%.  The company is the incumbent fixed-line and wireless telephone operator in Spain and the Czech Republic. It has the second-most wireless subscribers in the United Kingdom and a big position in Germany. It has substantial fixed-line and wireless assets in Latin America, where more than 60% of its customers reside. However, they provide only 42% of its revenue and 41% of EBITDA. Telefonica also owns stakes in Telecom Italia and China Unicom.

Here is my first look at Telefonica S.A.

Telefonica S.A. (ADR traded on NYSE as ticker: TEF)

Market price: $24.12

Shares: 4.56 billion

Market cap: $110.17 billion (larger than Verizon, but slightly smaller than AT&T)

Dividend record:  Good and growing

Dividend: $1.07 / semi-annual

Dividend yield: 8.87%

EPS: $3.26

Dividend payout ratio: 66% ($2.14 dividend / $3.26 EPS)

Earning power: $2.57 per share at 4.56 billion shares

(Earnings adjusted for changes in capitalization)

Earnings in Euros.  Use the exchange rate below to convert to USD.

            EPS       Net inc.             Adj. EPS

2006     1.30      6,238 M             1.37

2007     1.87      8,895 M             1.95

2008     1.63      7,592 M             1.66

2009     1.71      7,776 M             1.71

2010     2.25      10,167 M           2.23

Five year average earnings (in EUR) 1.78

Value territory at less than 12 times average earnings = 21.41 EUR

Speculative territory at above 20 times average earnings = 35.68 EUR

Exchange rate today:

0.6938 EUR = $1 USD

$1.4414 USD = $1 EUR

Valuations in USD

Five year average earnings in USD = $2.57

Telefonica S.A. trading at $24.12 per share which is 9.38 times average earnings.  This is value pricing.

Value territory at less than 12 times average earnings = $30.86

Speculative territory at more than 20 times average earnings = $51.43

Balance sheet: Shareholder equity is slowly growing

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Book value: 5.57 EUR or $8.03 per share

P/BV: 3.00 (that’s okay, but not great)

Current ratio: 0.75 (greater than 2.0 is good)

Quick ratio: 0.70 (greater than 1.0 is good)

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Miscellaneous news on AGNC, TNH, and SCCO.

American Capital Agency Corp. (AGNC) news:
Title of article is "Mortgage REIT dividends look risk free this summer".  I generally agree that the MREITs are going to do well this summer.  It takes awhile for an inverted yield curve to develop and wreck their profits.  But the people who write these articles do not understand how the Federal Reserve works.  The chairman of the Federal Reserve Board, Ben Bernanke, says he's keeping a key interest rate low for an extended period of time.  That interest rate is known as the Fed Funds Rate.  It is the rate that banks charge each other for overnight loans to meet reserve balance requirements.  However, the big banks have over $1 trillion in excess reserves.  They aren't lending to each other over night because they are stuffed full of reserves.  Commercial bankers are keeping the Fed Funds rate low not Ben Bernanke.

Its a good thing they commercial bankers aren't expanding lending because if they did loan those excess reserves, then prices would more than double from what they are today.  Think $10/gallon gasoline.

http://www.marketwatch.com/story/mortgage-reit-dividends-look-risk-free-this-summer-2011-06-30?reflink=MW_news_stmp

Conclusion: Don't buy AGNC for an investment, but you can buy it for a short term trade.  In the not too distant future interest rates will rise and destroy its asset values and net income profits.

Terra Nitrogen (TNH) news:
Shares of Terra Nitrogen Company, L.P. (NYSE: TNH) fell by 6.44% or $-9.13/share to $132.75. In the past year, the shares have traded as low as $66.38 and as high as $143.50. On average, 44595 shares of TNH exchange hands on a given day and today's volume is recorded at 52049. The shares are currently trading above the 50-day moving average which indicates that the shares have been experiencing strong upward momentum as the 50 DMA is above the 200 DMA. The stock may come back down to test the 50-day moving average, so look for a move back to the $124.35 area where the stock will likely see buying pressure.

Conclusion: Buy it way down in the $90.00 range when it is on sale.

Southern Copper (SCCO) news:

Southern Copper (SCCO) Showing Bearish Technicals With 7.23% Dividend Yield

Southern Copper (NYSE:SCCO) closed Wednesday's winning trading session at $32.25. In the past year, the stock has hit a 52-week low of $25.65 and 52-week high of $50.35. Southern Copper (SCCO) stock has been showing support around $31.50 and resistance in the $33.34 range. Technical indicators for the stock are Bearish. For a hedged play on Southern Copper (SCCO), look at the Aug '11 $32.00 covered call for a net debit in the $30.65 area. That is also the break-even stock price for this trade. This covered call has a duration of 51 days, provides 4.96% downside protection and an assigned return rate of 4.40% for an annualized return rate of 31.52% (for comparison purposes only). A lower-cost hedged play for Southern Copper (SCCO) would use a longer term call option in place of the covered call stock purchase. To use this strategy look at going long the Southern Copper (SCCO) Jan '12 $25.00 call and selling the Aug '11 $32.00 call for a total debit of $6.40. The trade has a lifespan of 51 days and would provide 2.64% downside protection and an assigned return rate of 9.37% for an annualized return rate of 67.1% (for comparison purposes only). Southern Copper (SCCO) has a current annual dividend yield of 7.23%. [THA-Seven Summits Research]


Conclusion: Technical analysis means nothing without an understanding of the fundamentals of the copper commodity price.  Wait until this stock drops to $23.04 (which is 12x average earnings).  The dividend isn't safe.


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Seeking Alpha contributor sees no risk with buying AGNC. He is blind.

Seeking Alpha contributor Mike Maher wrote a positive article on American Capital Agency Corp. (AGNC) on June 23rd, 2011.  He claims that each new equity offering is an opportunity to buy AGNC because a month later the stock will have climbed higher above the old price that exisited before the drop.  Where have we heard this before?  Does the phrase “house prices always go up” ring a bell in your mind?  The two year chart of AGNC does conform to Mr. Maher’s observations, but that doesn’t mean that there is no risk of AGNC going down from its current level.  Text from Mr. Maher’s article appear indented below.

http://bit.ly/AGNC2years

Mr. Maher wrote:

Wednesday's close of trading brings a familiar press release for holders of American Capital Agency (AGNC): news of a secondary offering. The firm originally announced it was selling an additional 36 million shares, with an overallotment option for another 5.4 million shares. Later, AGNC said it had sold 43.2 million shares, raising approximately $1.2 billion. Underwriters have the right to purchase 6.48 million shares to cover overallotments. Proceeds will be used to purchase more securities and for general corporate purchases. Shares are only dropping about 2%, perhaps signaling that the market was expecting another offering.

He got this right, “These massive offerings are the only way the firm can grow rapidly…”  The executives of AGNC are compensated for the amount of equity (book value per share).   All of a sudden the massive equity offerings make sense.  Here is the applicable risk factor from the 2010 annual report.  Read it for yourself.

Our Manager’s management fee is based on the amount of our Equity and is payable regardless of our performance.

Our Manager is entitled to receive a monthly management fee from us that is based on the amount of our Equity (as defined in our management agreement), regardless of the performance of our investment portfolio. For example, we would pay our Manager a management fee for a specific period even if we experienced a net loss during the same period. The amount of the monthly management fee is equal to one twelfth of 1.25% of our Equity and therefore is only increased by increases in our Equity. Increases to our Equity would be primarily from equity offerings, which could result in a conflict of interest between our manager and our stockholders with respect to the timing and terms of our equity offerings. Our Manager’s entitlement to substantial nonperformance-based compensation may reduce its incentive to devote sufficient time and effort to seeking investments that provide attractive risk-adjusted returns for our investment portfolio. This in turn could harm our ability to make distributions to our stockholders and the market price of our common stock.

As I wrote in March, AGNC is making these offerings a habit and this is the 5th offering since last September. The previous article shows each of the earlier offerings has been an opportunity, with shares being higher a month after the news. This offering should prove to be the same. These massive offerings are the only way the firm can grow rapidly and it seems like investors should get used to them. Since shares currently trade above book value, which was last reported as $25.96 at the end of March, it makes sense to use the strong stock price to raise more money and expand the business. The fact that AGNC is able to continually tap the equity markets and still see shares run up to new highs into the dividend is a testament both to the management of the firm and to investors' interest in the massive dividend, currently at $1.40 per quarter. While it would be nice to see this dividend rising as new shares are offered and the business expands, it's hard to complain about a 19% yield without sounding greedy. Management has proven itself to be an excellent operator, so I trust in both their ability and their judgment.

AGNC’s book value will crumble when short term interest rates rise faster than long term interest rates.  I have written why interest rates will rise here:

http://www.myhighdividendstocks.com/high-dividend-stocks/why-interest-rates-will-rise-why-agnc-will-lose

The management of AGNC freely admits that higher interest rates may adversely affect their book value or their net interest income.  They use the weasel word “may” because they think their active management will be able hedge rising interest rate with swaptions and other financial devices.

Because we invest in fixed-rate securities, an increase in interest rates on our borrowings may adversely affect our book value or our net interest income.

Increases in interest rates may negatively affect the market value of our agency securities. Any fixed-rate securities we invest in generally will be more negatively affected by these increases than adjustable-rate securities. In accordance with GAAP, we are required to reduce our stockholders’ equity, or book value, by the amount of any decrease in the fair value of our agency securities that are classified as available-for-sale.  Reductions in stockholders’ equity could decrease the amounts we may borrow to purchase additional agency securities, which may restrict our ability to increase our net income.  Furthermore, if our funding costs are rising while our interest income is fixed, our net interest income will contract and could become negative.

The shares are not dropping as much as they have in the past on the news of the offering, at $28.32 after hours, down $0.50 from the close of trading Wednesday. This makes a quick trade in the name less attractive, since there will be less ground for shares to make up after the offering. Expect heavy volume Thursday, but each of the last four offerings have been opportunities to get into the name at a discount and I see no reason this offering is any different. As long as the dividend is not cut and book value continues to climb, AGNC is a buy and these offerings are opportunities.

Disclosure: I am long AGNC.

True, he sees no reason to not buy AGNC’s recent drop in price.  But I do.  If you want to really understand the risks associated with AGNC and other mortgage REITs, then read some of my past articles on AGNC:

http://www.myhighdividendstocks.com/category/high-dividend-stocks/american-capital-agency-corp

Disclosure: I do not own AGNC.  I don’t plan on owning AGNC because of its potential dividend cut, poor earning power, and weak balance sheet.

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Link to original Seeking Alpha article: http://seekingalpha.com/article/276339-another-offering-another-opportunity-in-american-capital-agency

American Capital Agency announced an new offering for 49.69 M-I-L-L-I-O-N more shares says Dr. Evil.

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AGNC can only grow by issuing new shares.  The $1.2 billion in proceeds from its newest equity offering will be leveraged 6x-8x to add at least another $7.2 billion to its portfolio of agency securities.  Those agency securities are backed by the bankrupt US government.  Imagine that Greece was backing up Greek mortgage backed securities.  What security is that!  Well, the US is worse off than Greece when you consider the liabilities of Social Security and Medicare.  Owners of AGNC will get burned someday when the inverted yield curve returns and deficits do begin to matter.  But until then greater fools can collect a handsome dividend yield.

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American Capital Agency Announces Pricing of Public Offering of Common Stock

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BETHESDA, Md., June 22, 2011 /PRNewswire via COMTEX/ -- American Capital Agency Corp. /quotes/zigman/110324/quotes/nls/agnc AGNC -1.98% ("AGNC" or the "Company") announced today that it priced a public offering of 43,200,000 shares of common stock for total estimated gross proceeds of approximately $1.2 billion.

In connection with the offering, the Company has granted the underwriters an option for 30 days to purchase up to an additional 6,480,000 shares of common stock to cover overallotments, if any. The offering is subject to customary closing conditions and is expected to close on June 28, 2011.

AGNC expects to use the net proceeds from this offering to acquire additional agency securities as market conditions warrant and for general corporate purposes.

Citi, J.P. Morgan Securities LLC, UBS Securities LLC and Wells Fargo Securities, LLC are joint book running managers for the offering. JMP Securities LLC, Mitsubishi UFJ Securities, Nomura Securities International, Inc. and RBC Capital Markets are co-managers for the offering.

The offering will be made pursuant to AGNC's existing effective shelf registration statement, previously filed with the Securities and Exchange Commission. The offering of these securities will be made only by means of a prospectus and a related prospectus supplement. Copies of the prospectus and prospectus supplement may be obtained, when available, from Citi, Brooklyn Army Terminal, 140 58th Street, 8th Floor, Brooklyn, New York 11220, telephone: (800) 831-9146; J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Ave, Edgewood, NY 11717, telephone: (866) 803-9204; UBS Securities LLC, Attention: Prospectus Department, 299 Park Avenue, New York, New York 10171, telephone: (888) 827-7275; or Wells Fargo Securities, LLC, Attn: Equity Syndicate, 375 Park Avenue, New York, NY 10152-4077, telephone: (800) 326-5897, email: cmclientsupport@wellsfargo.com.

This press release does not constitute an offer to sell or the solicitation of an offer to buy shares of common stock, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

American Capital Agency plans $1B offering

Washington Business Journal - by Jeff Clabaugh

Date: Wednesday, June 22, 2011, 5:56pm EDT

Related:

Banking & Financial Services

Bethesda-based American Capital Agency Corp., which buys government-backed residential mortgage securities, is planning its largest stock offering since going public three years ago, potentially raising more than $1 billion to fund its investments.

The real estate investment trust, an affiliate of private equity firm American Capital, Ltd. (NASDAQ: ACAS), says it will sell 36 million shares of common stock in a secondary offering, and give underwriters the option to purchase an additional 5.4 million shares.

American Capital Agency stock (NASDAQ: AGNC) ended Wednesday trading at $28.85 per share.

American Capital Agency raised about $780 million from a secondary offering in March, and another $655 million in January.

The REIT’s profits more than doubled last quarter as net interest income from increased investments rose five-fold. Its investment portfolio has ballooned to $28.3 billion as of the end of the first quarter.

http://www.bizjournals.com/washington/news/2011/06/22/american-capital-agency-plans-1b.html

* * * * * * * *

(RTTNews) - American Capital Agency Corp. (AGNC: News ) announced after the close Wednesday that it plans to make a public offering of 36,000,000 shares of its common stock. The stock is now down 0.56 on 442K shares.

American Capital Agency posted gains in early trade Wednesday, but settled into a range for the bulk of the session. Shares finished up by 0.35 at $28.85. The stock rebounded off of support, following nearly a 2-week decline.

http://www.rttnews.com/ArticleView.aspx?Id=1652048&SM=1