Terms

Series

6.95% Series F Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock

Liquidation Preference

$25.00

Coupon Rate

6.95%

Rate Type

Fixed To Floating

Annual Dividend

$1.74

Payment Frequency

Quarterly

Cumulative

Yes

Perpetual

Yes

Convertible

Yes

Callable

Yes

First Call Date

September 30, 2022

First Call Price

$25.00

Capital Stack Ranking

Junior To: All Existing And Future Indebtedness Of Annaly Capital Management, Inc., All Liabilities Of Subsidiaries, Any Future Senior Stock; Pari Passu With: Series A 7.875% Cumulative Redeemable Preferred Stock, Series B 6.00% Cumulative Redeemable Preferred Stock, Series C 7.625% Cumulative Redeemable Preferred Stock, Series D 7.50% Cumulative Redeemable Preferred Stock, Series E 7.625% Cumulative Redeemable Preferred Stock; Senior To: Common Stock, Any Future Junior Stock

Regulatory (Basel III) Call

No

Tax Classification

Reit Passthrough

Qualifies for QDI

No

Qualifies for DRD

No

Shares Offered

28,000,000

Prospectus Summary

Annaly Capital Management, Inc. (NYSE: NLY), a leading REIT-structured diversified mortgage capital manager, is offering 28,000,000 shares of its Series F Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock at a liquidation preference of $25.00 per share. The security pays a fixed rate of 6.95% per annum ($1.7375/share annually, or ~$0.4344/quarter) through September 29, 2022, then converts to a floating rate of three-month LIBOR plus 493 basis points. The preferred is not callable until September 30, 2022, at $25.00 plus accrued dividends. Critically, dividends are cumulative — if Annaly skips or defers a payment, all arrears must be paid in full before any distributions on common stock or junior securities, providing meaningful downside protection for income investors. The Series F Preferred Stock sits above common equity and all other Junior Stock in the capital stack, and ranks on parity with Annaly's existing Series A through E preferred issues. However, it is effectively subordinated to all of Annaly's existing and future debt obligations and to all liabilities of its operating subsidiaries — which are separate legal entities with no obligation to upstream funds to the parent for preferred dividends. This structural subordination is material: Annaly is a highly leveraged mortgage REIT with total liabilities exceeding $72 billion against roughly $13 billion in equity. There is no regulatory capital call provision (this is a REIT, not a bank); however, Annaly retains the right to redeem the preferred early if necessary to preserve its REIT tax qualification, and may also redeem within 120 days of a qualifying Change of Control. At the $25.00 offering price, the current yield is 6.95% fixed until September 30, 2022. As a REIT, Annaly's preferred dividends are generally classified as ordinary income rather than qualified dividend income (QDI), meaning they typically do not qualify for the preferential 15%/20% federal tax rate available to QDI recipients, nor for the corporate dividends-received deduction (DRD). Dividends are paid quarterly on the last day of March, June, September, and December, with record dates set by the board. The first dividend (a long stub period from July 31, 2017) is expected to be $0.72396 per share payable December 31, 2017. If Annaly fails to declare dividends for six or more quarterly periods, preferred holders collectively gain the right to elect two additional board directors until arrears are cured.

Summarized from the SEC prospectus filing.

Distribution History

Floating Rate Terms

Conversion Terms

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If Annaly fails to pay dividends on the Series F Preferred Stock for six or more full quarterly periods, holders gain the right to elect two directors; the cumulative structure means unpaid dividends accrue and must be paid in full before any distributions may be made on common stock or other Junior Stock.

Other Preferreds from Annaly Capital Management, Inc.

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 48 (Average)