ARLINGTON ASSET INVESTMENT CORP. (FBR) SPO
|Company Name||ARLINGTON ASSET INVESTMENT CORP.|
|Company Address||1001 19TH STREET NORTH
ARLINGTON, VA 22209
|CEO||Emanuel J. Friedman and Eric F. Billings|
|Employees (as of 9/17/2003)||500|
|State of Inc||VA|
|Fiscal Year End||12/31|
|Exchange||New York Stock Exchange|
|Shares Over Alloted||--|
|Shareholder Shares Offered||--|
|Lockup Period (days)||180|
|Quiet Period Expiration||10/28/2003|
We estimate that the net proceeds from the sale of the 23,000,000 shares of common stock that we are selling in this offering will be approximately $373.9 million, or $430.0 million if the underwriters exercise their over-allotment option in full, after deducting underwriting discounts and commissions and estimated offering expenses payable by us. We intend to use the net proceeds of this offering, subject to maintaining our REIT qualification, to invest in mortgage-backed securities and equity securities and for other general corporate purposes. The amounts and timing of our use of the net proceeds of this offering will depend on a number of factors, including the level of interest rates, the yield curve and the availability of attractive equity investments. As a result, we will retain broad discretion in the allocation of the net proceeds from this offering. We have not determined the manner in which we will allocate the net proceeds with any certainty. Initially, we may reduce our obligations under repurchase agreements as we deem appropriate in order to manage our overall leverage and we intend to invest in residential mortgage-backed securities.
Competition for the recruiting and retention of employees may increase elements of our compensation costs. We cannot assure you that, in order to support our growth plans, we will be able to recruit and hire a sufficient number of new employees with the desired qualifications in a timely manner. We regularly review our compensation policies, including stock incentives. Nonetheless, our incentives may be insufficient in light of competition for experienced professionals in the investment industry, particularly if the value of our stock declines or fails to appreciate sufficiently to be a competitive source of a portion of professional compensation. Increased compensation costs could adversely affect the amount of cash available for distribution to shareholders.
We are a leading investment banking firm that provides investment banking, institutional brokerage and asset management services and invests capital as principal in mortgage-backed securities (“MBS”) and merchant banking opportunities. On March 31, 2003, we were formed through the merger of
two existing companies, FBR Asset Investment Corporation and Friedman, Billings, Ramsey Group, Inc., with and into a newly formed subsidiary of FBR Asset Investment Corporation, with the subsidiary surviving as the successor corporation resulting from the two mergers. Prior to completion of the two mergers, FBR Asset Investment Corporation was a New York Stock Exchange listed real estate investment trust, or REIT, managed by a subsidiary of Friedman, Billings, Ramsey Group, Inc., with a primary focus in mortgage-backed securities and merchant banking investments in debt and equity securities and Friedman, Billings, Ramsey Group, Inc. was the New York Stock Exchange listed parent company of Friedman, Billings, Ramsey & Co., Inc. and other affiliated companies engaged in the investment banking, institutional brokerage and asset management businesses. Upon completion of the two mergers, the surviving corporation assumed the name Friedman, Billings, Ramsey Group, Inc. and succeeded to the REIT status of FBR Asset Investment Corporation for U.S. federal income tax purposes. We refer to the surviving corporation as FBR Group in this prospectus supplement. Our investment banking, institutional brokerage and asset management businesses and a portion of our merchant banking business are conducted through taxable REIT subsidiaries, which pay income taxes on their earnings at normal corporate income tax rates.
|Company Counsel||Hunton & Williams LLP|
|Lead Underwriter||Friedman, Billings, Ramsey and Co., Inc|
|Lead Underwriter||J.P. Morgan Securities Inc.|
|Underwriter||Banc of America Securities LLC|
|Underwriter||BB&T Capital Markets|
|Underwriter||Credit Lyonnais Securities|
|Underwriter||Flagstone Securities, LLC|
|Underwriter||Keefe, Bruyette & Woods, Inc|
|Underwriter||Scotia Capital Markets|
|Underwriter||Stifel Nicolaus & Company, Incorporated|
|Underwriter Counsel||Hogan & Hartson L.L.P|
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