Terms

Series

8.250% Series A Cumulative Redeemable Preferred Stock

Liquidation Preference

$25.00

Coupon Rate

8.25%

Rate Type

Fixed

Annual Dividend

$2.06

Payment Frequency

Monthly

Cumulative

Yes

Perpetual

Yes

Convertible

Yes

Callable

Yes

First Call Date

July 27, 2012

First Call Price

$25.00

Capital Stack Ranking

Junior To: All Debt Obligations Of Armour Residential Reit, Inc.; Pari Passu With: Other Series Of Preferred Stock Of Equal Rank, If Any; Senior To: Common Stock

Regulatory (Basel III) Call

No

Tax Classification

Reit Passthrough

Qualifies for QDI

No

Qualifies for DRD

No

Shares Offered

2,000,000

Prospectus Summary

ARMOUR Residential REIT, Inc. is offering up to 2,000,000 shares of its 8.250% Series A Cumulative Redeemable Preferred Stock with a $25.00 per share liquidation preference, paying $2.0625 per share annually at a fixed rate. Dividends are paid monthly on the 27th of each month and are cumulative — meaning any missed dividends accrue and must be paid in full before any distributions can be made to common stockholders, providing a degree of income protection for preferred holders. The Series A Preferred Stock ranks senior to ARMOUR's common stock with respect to dividends and liquidation, but is junior to all of the company's debt obligations. As a REIT holding company, there is no bank subsidiary subordination concern, though equity holders remain structurally behind all creditors. The preferred is callable at any time at the issuer's option at $25.00 plus accrued dividends, creating meaningful reinvestment risk for investors. A special optional redemption right also exists within 120 days of a Change of Control, with conversion rights available to holders if the issuer does not redeem. There is no regulatory capital event call provision. At the $25.00 liquidation preference, the preferred yields 8.25% annually ($2.0625/share), paid monthly (~$0.171875/month). As a REIT, dividends are generally treated as ordinary income and do not qualify for the preferential 15%/20% qualified dividend income (QDI) rate for individual investors, nor the dividends-received deduction (DRD) for corporate holders. The record date is the 15th of each month (or the prior business day if a weekend/holiday). Because the preferred is cumulative and ARMOUR must pay all accrued preferred dividends before resuming common dividends, common dividend interruptions trigger a stopper on common distributions but do not themselves interrupt preferred payments.

Summarized from the SEC prospectus filing.

Distribution History

Conversion Terms

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If cumulative dividends on the Series A Preferred Stock are not paid in full, the issuer is generally restricted from paying dividends on junior securities including common stock.

Other Preferreds from ARMOUR Residential REIT Inc

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 39 (Weak)