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Dynex Capital, Inc. to Redeem Series D Preferred Stock for Common Stock

^{Published on 2010-09-13 13:20:28 - Market Wire}
 

GLEN ALLEN, Va.--([ BUSINESS WIRE ])--Dynex Capital, Inc. (NYSE: DX) announced today that its Board of Directors has authorized the Company to redeem all 4,221,539 outstanding shares of the Companya™s SeriesD 9.50% Cumulative Convertible Preferred Stock. In the redemption, which is expected to be completed on or about October 15, 2010, each holder of a share of SeriesD Preferred Stock will receive one share of Dynexa™s Common Stock. This redemption is taking place pursuant to provisions of Dynexa™s articles of incorporation, which provide for the redemption of the SeriesD Preferred Stock once the closing price of Dynexa™s Common Stock has equaled or exceeded $10.00 per share for at least 20 out of 30 consecutive trading days. As of the close of the market today, Dynexa™s Common Stock has closed at or above $10.00 per share for 20 out of the most recent 28 trading days, including today. The Company noted that based on its reported June 30, 2010 book value, the redemption will be modestly accretive to book value per common share and post-redemption, reported basic and diluted earnings per share for the Company will be essentially identical.

Dynex previously announced a dividend on the SeriesD Preferred Stock payable for the third quarter of 2010 for which the record date is September30, 2010 and the payment date is October29, 2010. Because the redemption will not be effective until October, after the record date for the dividend, each of the holders of SeriesD Preferred Stock on September 30, 2010 will receive the announced preferred stock dividend of $0.25 per share on October 29, 2010 as if the Preferred Stock were still outstanding. Shareholders will receive any future dividends declared and paid on the Common Stock of the Company to the extent they remain holders of Common Stock. For the third quarter of 2010, the Company declared a Common Stock dividend of $0.25 on the same record date and payment date terms as the Preferred Stock.

Thomas Akin, Chairman and Chief Executive Officer, commented:

aWe are excited about the recent successes of Dynex that have made this redemption possible. With the conversion of the Series D Preferred Stock, our outstanding Common Stock will exceed 22.6 million shares and our market capitalization will exceed $238 million based on Fridaya™s closing price of $10.55 per share. For the third quarter of 2010, we declared a dividend on our Common Stock that exceeded the dividend requirement of the preferred stock. We hope that our Series D Preferred Stockholders will remain with the Company as new Common Stockholders with the opportunity to share in Dynexa™s future growth. We remain committed to operating Dynex in an intelligent, shareholder friendly manner.a

The Company also announced that the Series D Preferred Stock shareholders will be receiving a redemption notice in the next several weeks outlining the necessary steps to effect the redemption and conversion. Bank of New York Mellon will be conducting the redemption on behalf of the Company as its transfer agent.

Dynex Capital, Inc. is areal estate investment trust, or REIT, which invests in mortgage assets on a leveraged basis. The Companyinvests in Agency and non-Agency RMBS and CMBS. The Companyalso has investments in securitized single-family residential and commercial mortgage loansoriginated by the Companyfrom 1992 to 1998. Additional information about Dynex Capital, Inc. is available at [ www.dynexcapital.com ].

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regardingthe business of Dynex Capital, Inc.that are not historical facts, including statements about future cost savings, are "forward-looking statements" that involve risks and uncertainties. For a discussion ofthese risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report on Form 10-K and other reports filed with the Securities and Exchange Commission.