American Capital Mortgage REIT Prices Public Offering to Buy Agency Debt

American Capital Agency Corp. (AGNC), a real estate investment trust (REIT) that that invests in agency pass-through securities and US government-backed collateralized mortgage obligations, priced a public offering of 6m shares of its common stock at a public offering price of $25.75 per share for total net proceeds of approximately $147m. American Capital only buys debt from government-sponsored entities, Fannie Mae (FNM) and Freddie Mac (FRE), in addition to Ginnie Mae. AGNC said it expects to use the net proceeds from the offering to acquire additional agency securities as market conditions warrant and for general corporate purposes. In addition, AGNC granted the underwriters an option for 30 days to purchase up to an additional 900,000 shares to cover overallotments, if any. The public offering is subject to customary closing conditions and is expected to close on May 19, 2010. Citi (C), Credit Suisse Securities (CS), Deutsche Bank Securities (DB) and UBS Investment Bank (UBS) are joint book-running managers for the offering. JPMorgan’s (JPM) JMP Securities and Keefe, Bruyette & Woods, are the co-managers for the offering. American Capital Agency is externally managed and advised by American Capital Agency Management, a subsidiary of wholly-owned portfolio company American Capital (ACAS). Write to Austin Kilgore. The author held no relevant investments.

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