American Capital Agency Corp. (
announced an offering of 50 million equity shares. Gross proceeds
from the offering are expected to be $1.58 billion, excluding
expenses. The company intends to use this amount to obtain
additional agency securities as market conditions warrant and for
other corporate purposes.
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To cover any over-allotments, American Capital plans to offer a
30-day option to the underwriters to purchase an additional 7.5
million shares. The offering is expected to close on Mar 5, 2013,
subject to customary closing conditions.
J.P. Morgan Securities LLC,
Citigroup Inc (
, BofA Merrill Lynch of
Bank of America Corporation (
The Goldman Sachs Group, Inc. (
, Credit Suisse Securities (USA) LLC and Morgan Stanley & Co.
LLC acted as joint book-running managers for the public offering.
We expect that the offering would aid the company achieve
financial flexibility and position it favorably to pursue
investment opportunities, which will go a long way in improving
the top-line growth. However, the resulting impact of share
dilution cannot be ignored.
Earlier last month, American Capital reported fourth-quarter
results with net spread income per share of 89 cents, which fell
short of the Zacks Consensus Estimate of $1.01. However, it
exceeded the prior quarter figure of 79 cents per share.
During the fourth quarter, American Capital recorded an
annualized economic return on common equity of 5%. As of Dec 31,
2012, the company's investment portfolio comprised $85.2 billion
worth of agency securities and $12.9 billion of net TBA
(to-be-announced) mortgage positions, at fair value.
As of Dec 31, 2012, American Capital's cash position stood at
American Capital currently has a Zacks Rank #3 (Hold).