Hatteras Financial Corp. (NYSE: HTS) (the “Company”) today announced that it priced an underwritten public offering of 10,000,000 shares of its 7.625% Series A Cumulative Redeemable Preferred Stock (the “Series A Preferred Stock”) at a public offering price of $25.00 per share, for gross proceeds of $250.0 million, before deducting the underwriting discount and other estimated offering costs. The Company granted the underwriters a 30-day option to purchase up to an additional 1,500,000 shares of the Series A Preferred Stock solely to cover overallotments, if any. The offering is expected to close on August 27, 2012, subject to customary closing conditions. The Company will file an application to list the Series A Preferred Stock on the New York Stock Exchange under the symbol “HTSPrA.”
The Company intends to use the estimated net offering proceeds, after deducting the underwriting discount and other estimated offering costs, of $241.9 million (or $278.2 million if the underwriters exercise their overallotment option in full) to acquire agency securities with short effective durations, primarily three-year, five-year, seven-year and 10-year hybrid ARMs, and other short duration agency securities, such as agency securities backed by 10-year or 15-year fixed-rate mortgages. The Company may also use the net proceeds of this offering for general corporate purposes, which may include the repayment of outstanding indebtedness and the purchase of hedging instruments.
Wells Fargo Securities, LLC, Citigroup Global Markets Inc., UBS Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated are serving as the joint book-running managers for the offering. RBC Capital Markets, LLC, Stifel, Nicolaus & Company, Incorporated, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Jefferies & Company, Inc., J.P. Morgan Securities LLC, BB&T Capital Markets, a division of Scott & Stringfellow, LLC, Keefe, Bruyette & Woods, Inc. and Sterne, Agee & Leach, Inc. are serving as co-managers for the offering.