Terms

Series

7.50% Series E Cumulative Redeemable Preferred Stock

Liquidation Preference

$25.00

Coupon Rate

7.5%

Rate Type

Fixed

Annual Dividend

$1.88

Payment Frequency

Quarterly

Cumulative

Yes

Perpetual

Yes

Convertible

Yes

Callable

Yes

First Call Date

May 13, 2018

First Call Price

$25.00

Redemption Notice Period

30 days

Capital Stack Ranking

Junior To: All Existing And Future Indebtedness Of Capstead Mortgage Corporation, Indebtedness Of Subsidiaries, Any Future Senior Equity Securities; Pari Passu With: Series A Preferred Stock ($1.60 Cumulative Preferred Stock), Series B Preferred Stock ($1.26 Cumulative Convertible Preferred Stock), Any Future Parity Preferred Stock; Senior To: Common Stock, All Other Junior Equity Securities

Regulatory (Basel III) Call

No

Tax Classification

Reit Passthrough

Qualifies for QDI

No

Qualifies for DRD

No

Shares Offered

6,000,000

Prospectus Summary

Capstead Mortgage Corporation's 7.50% Series E Cumulative Redeemable Preferred Stock (NYSE: CMOPRE) is a perpetual, fixed-rate preferred stock with a $25.00 liquidation preference, paying $1.875 per share annually ($0.46875 per quarter). The stock is not callable before May 13, 2018, after which Capstead may redeem it at par plus accrued dividends. Because dividends are cumulative, any missed payments accumulate and must be paid in full before Capstead can resume dividends on common stock or junior securities — providing investors meaningful protection against dividend interruption. The Series E Preferred Stock sits above common equity but below all of Capstead's debt in the capital stack. It ranks pari passu with the existing Series A and Series B Preferred Stock. At March 31, 2013, Capstead carried approximately $12.82 billion in repurchase facility borrowings and $100 million in trust-preferred securities, all of which are senior to this preferred. There is no regulatory capital (Tier 1) redemption provision because Capstead is a mortgage REIT, not a bank; however, the company retains a special right to redeem shares for REIT qualification preservation purposes, and may also redeem within 120 days of a Change of Control at $25.00 plus accrued dividends. At the $25.00 offering price, the effective yield is 7.50% annually, paid quarterly on January 15, April 15, July 15, and October 15, with record dates set on the last day of the preceding calendar quarter. Because Capstead is a REIT, dividends are generally taxed as ordinary income rather than at the lower 15%/20% qualified dividend (QDI) rate, and the dividends-received deduction for corporate holders typically does not apply. The dividend stopper prevents any cash distributions on common stock or parity/junior preferred stock until all accumulated Series E dividends are paid, giving preferred holders a meaningful structural check on capital allocation.

Summarized from the SEC prospectus filing.

Distribution History

Conversion Terms

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If Capstead has not paid full cumulative dividends on the Series E Preferred Stock, it cannot pay dividends on, or redeem/repurchase, its common stock or any junior or parity preferred stock (including Series A and Series B Preferred Stock), until all accumulated Series E dividends are paid or set apart.

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 63 (Strong)