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Capstead Mortgage Corporation Declares a $0.36 Fourth Quarter 2008 Common Dividend

^{Published on 2008-12-12 03:45:31 - Market Wire}
 

DALLAS--([ BUSINESS WIRE ])--Capstead Mortgage Corporation (NYSE: CMO) announced today that it will pay a fourth quarter 2008 dividend of $0.36 per common share payable on January 20, 2009 to stockholders of record as of December 31, 2008.

Commenting on the current dividend and market conditions, Andrew F. Jacobs, President and Chief Executive Officer, said, "Interest rates on our short-term borrowings began increasing late in the third quarter as 30-day LIBOR rates rose from approximately 2.50% in mid-September to over 4.50% by mid-October, during the height of the turmoil in the credit markets. As expected, these higher borrowing rates have reduced our fourth quarter financing spreads and earnings. Since mid-October, 30-day LIBOR rates have declined considerably to a current level of 1.20%, which should allow for improved financing spreads and earnings in future periods.

"We intend to continue to focus our attention on our core investment strategy of managing a conservatively leveraged portfolio of agency-guaranteed residential ARM securities, which today remains at the lower end of our traditional range of eight to twelve times leverage on our long-term investment capital."

About Capstead

Capstead Mortgage Corporation, formed in 1985 and based in Dallas, Texas, is a self-managed real estate investment trust for federal income tax purposes. Capstead's core strategy is managing a leveraged portfolio of residential mortgage pass-through securities consisting almost exclusively of residential ARM securities issued and guaranteed by government-sponsored entities, either Fannie Mae or Freddie Mac, or by an agency of the federal government, Ginnie Mae. Agency-guaranteed residential mortgage securities carry an implied AAA credit rating with limited, if any, credit risk that has been enhanced by the conservatorship of Fannie Mae and Freddie Mac by the federal government.

Forward-looking Statements

This document contains "forward-looking statements" (within the meaning of the Private Securities Litigation Reform Act of 1995) that inherently involve risks and uncertainties. Capstead's actual results and liquidity can differ materially from those anticipated in these forward-looking statements because of changes in the level and composition of the Company's investments and other factors. As discussed in the Company's filings with the Securities and Exchange Commission, these factors may include, but are not limited to, changes in general economic conditions, the availability of suitable qualifying investments from both an investment return and regulatory perspective, the availability of new investment capital, the availability of financing at reasonable levels and terms to support investing on a leveraged basis, fluctuations in interest rates and levels of mortgage prepayments, deterioration in credit quality and ratings, the effectiveness of risk management strategies, the impact of differing levels of leverage employed, liquidity of secondary markets and credit markets, increases in costs and other general competitive factors. In addition to the above considerations, actual results and liquidity related to investments in loans secured by commercial real estate are affected by borrower performance under operating and/or development plans, lessee performance under lease agreements, changes in general as well as local economic conditions and real estate markets, increases in competition and inflationary pressures, changes in the tax and regulatory environment including zoning and environmental laws, uninsured losses or losses in excess of insurance limits and the availability of adequate insurance coverage at reasonable costs, among other factors.