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Annaly Capital Slides on Secondary Offering

(Annaly Capital report updated with broker action and background of recent REIT offerings.)

NEW YORK (TheStreet) -- Annaly Capital Management (NLY) shares shed several points amid heavy volume Tuesday after the New York City-based real estate investment trust unveiled plans for a dilutive public offering of 75 million common shares.

Annaly Capital, a mortgage REIT, said it intends to use the money it raises to purchase mortgage-backed securities for its investment portfolio and for general corporate purposes. As of Sept. 30, Annaly Capital had roughly 622 million outstanding shares, so the offering represents an increase of 12.5%. In addition, underwriters will be able to sell an additional 11.25 million shares to cover over-allotments.

Annaly Capital shares shed 2.7% to $17.39 ahead of the closing bell Tuesday. Nearly 100 million shares were in play, compared with their average daily trading volume of 9.6 million.

In 2010, Annaly shares rose a little less than 3%. Real estate investment trusts pay out substantially all of their earnings in dividends, however, which typically keeps a lid on per share performance. For fiscal 2010, the company's declared dividends totaled $2.65 with the final quarterly dividend of the year of 64 cents slated to be paid on Jan. 27 to shareholders of record on Dec. 28.

That 64-cent dividend actually represented a 5.9% decrease from its prior payout of 68 cents, declared in September and paid in October.

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