ARMOUR RESIDENTIAL REIT, INC. (ARR) SPO
|Company Name||ARMOUR RESIDENTIAL REIT, INC.|
|Company Address||3001 OCEAN DRIVE
VERO BEACH, FL 32963
|Company Phone||(772) 617-4340|
|CEO||Scott J. Ulm and Jeffrey J. Zimmer|
|Employees (as of 12/17/2010)||6|
|State of Inc||--|
|Fiscal Year End||12/31|
|Exchange||American Stock Exchange|
|Shares Over Alloted||0|
|Shareholder Shares Offered||--|
|Lockup Period (days)||180|
|Quiet Period Expiration||1/26/2011|
We are offering 3,850,000 shares of our common stock at a public offering price of $7.50 per share. We estimate that the net proceeds we will receive from selling common stock in this offering will be approximately $27,181,250 after deducting underwriting discounts and commissions payable by us and estimated offering expenses of approximately $1,693,750. We plan to use all the net proceeds from this offering above to acquire additional target assets in accordance with our objectives and strategies described in this prospectus. Our focus will be on purchasing Agency Securities and Agency Debt and other assets, subject to our investment guidelines and REIT qualification requirements. ARRM will make determinations as to the percentage of our assets that will be invested in each of our target assets. Its decisions will depend on prevailing market conditions and may change over time in response to opportunities available in different interest rate, economic and credit environments. Until appropriate assets can be identified, ARRM may invest the net proceeds from this offering in interest- bearing short-term investments, including funds that are consistent with our qualification as a REIT. These investments are expected to provide a lower net return than we will seek to achieve from our target assets. Prior to the time we have fully used the net proceeds of this offering to acquire our target assets, we may fund our quarterly cash distributions out of such net proceeds.
Our success depends, in large part, on our ability to acquire assets at favorable spreads over our borrowing costs. In acquiring Agency Securities, we compete with mortgage REITs, mortgage finance and specialty finance companies, savings and loan associations, banks, mortgage bankers, insurance companies, mutual funds, institutional investors, investment banking firms, other lenders, governmental bodies and other entities. Many of these organizations have greater financial resources and access to lower costs of capital than we do. In addition, there are numerous mortgage REITs with similar asset acquisition objectives, including Agency Securities, and others may be organized in the future. The effect of the existence of additional REITs may be to increase competition for the available supply of mortgage assets suitable for purchase. In addition, the U.S. Federal Reserve has initiated a program to purchase $200.0 billion in direct obligations of Fannie Mae, Freddie Mac and the Federal Home Loan Banks and $1.3 trillion in Agency Securities issued and guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae. The U.S. Federal Reserve stated that its actions are intended to reduce the cost and increase the availability of credit for the purchase of houses, which in turn was expected to support housing markets and foster improved conditions in financial markets more generally. The purchases of direct obligations began during the first week of December 2008 and the purchases of Agency Securities began on January 5, 2009. Under the U.S. Federal Reserveï¿½s program it has purchased $1.0 trillion in Agency Securities as of March 3, 2010.The program is expected to terminate on March 31, 2010. One of the effects of these programs has been to increase competition for available Agency Securities, with the result being an increase in market price. Once the program is terminated it may cause a decrease in demand for these securities, which could potentially reduce market prices.
We are a Maryland corporation that has elected to be a real estate investment trust, or REIT, for U.S. federal income tax purposes, commencing with our fiscal year ended December 31, 2009. We are externally managed by ARMOUR Residential Management LLC, or ARRM, an entity affiliated with our
executive officers. We invest primarily in hybrid adjustable rate, adjustable rate and fixed rate residential mortgage-backed securities, or RMBS, issued or guaranteed by U.S. Government-chartered entities, which we refer to as Agency Securities. The entities issuing or guaranteeing the Agency Securities include: · the Federal National Mortgage Association, commonly known as Fannie Mae; · the Federal Home Loan Mortgage Corporation, commonly known as Freddie Mac; and · the Government National Mortgage Administration, commonly known as Ginnie Mae. From time to time, a portion of our portfolio may be invested in unsecured notes and bonds issued by U.S. Government-chartered entities, which we refer to as Agency Debt. Agency Debt includes: · U.S. Treasuries; and · money market instruments. We seek attractive long-term investment returns by investing our equity capital and borrowed funds in our targeted asset class. We earn returns on the spread between the yield on our assets and our costs, including the interest cost of the funds we borrow, after giving effect to our hedges. When acquiring Agency Securities, we typically finance our acquisitions with borrowings under a series of short-term repurchase agreements at the most competitive interest rates available to us and then cost-effectively mitigate our interest rate and other risks based on our entire portfolio of assets, liabilities and derivatives and our management's view of the market. Successful implementation of this approach requires us to address and effectively mitigate interest rate risk and maintain adequate liquidity. ------ We were incorporated in the state of Maryland on February 5, 2008. On November 1, 2009, we consummated a business combination with Enterprise Acquisition Corp., a publicly traded blank check company formed for the purposes of acquiring an operating business. As a result of this transaction, which we refer to as the Business Combination, we became a publicly traded company. Our principal offices are located at 3001 Ocean Drive, Suite 201, Vero Beach, Florida 32963. Our phone number is (772) 617-4340. Our website is www.ARMOURREIT.com.
|Company Counsel||Akerman Senterfitt|
|Lead Underwriter||Ladenburg Thalmann & Co. Inc.|
|Lead Underwriter||Ladenburg Thalmann and Co. Inc|
|Transfer Agent||Continental Stock Transfer & Trust Company|
|Underwriter||Aegis Capital Corp|
|Underwriter||Boenning and Scattergood, Inc|
|Underwriter||Macquarie Capital (USA) Inc|
|Underwriter||Maxim Group, LLC|
|Underwriter||National Securities Corp|
|Underwriter Counsel||Graubard Miller|
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