Annaly Capital Management, Inc. and Chimera Investment Corporation Announce Internalization of Chimera’s Management
August 05 2015 - 4:15PM
Business Wire
Transaction to enable both companies to pursue
independent strategies
Separation to drive operational and economic
efficiencies for both companies
Internalization ensures continuity of Chimera’s
experienced management team
Annaly Capital Management, Inc. (NYSE: NLY) (“Annaly”) and
Chimera Investment Corporation (NYSE: CIM) (“Chimera”) today
announced that Chimera has entered into an agreement with Fixed
Income Discount Advisory Company (“FIDAC”), a wholly-owned
subsidiary of Annaly, to internalize the management of Chimera. In
connection with the transaction, Chimera will purchase Annaly’s
4.4% stake in Chimera for a purchase price of $126.4 million
($14.05 per share). The internalization is effective August 5,
2015.
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Annaly and the independent members of the Chimera Board agreed
to the internalization in order to facilitate the pursuit of
independent strategies at both companies. The internalization also
will result in operational and economic efficiencies for Annaly and
Chimera, while ensuring continuity of Chimera’s experienced
management team. Given the resulting benefits to both companies, no
contractual penalties will be associated with the management
agreement termination.
“We are proud to have contributed to Chimera’s growth since its
inception in 2007,” said Kevin Keyes, President and incoming Chief
Executive Officer of Annaly. “This transaction furthers Annaly’s
diversification strategy, allowing for more opportunistic capital
allocation and resource alignment around our investment
initiatives.”
“It is the right time in Chimera’s evolution to internalize
management and move forward independently. This move maintains
continuity of our management team, while providing strategic,
operational and financial benefits that are in our shareholders’
best interests,” stated Chimera Chairman Paul Donlin. “I would like
to thank the Annaly team for their partnership, and we look forward
to the next phase of Chimera’s growth.”
As a result of the internalization, FIDAC personnel who focus
their efforts on Chimera will become employees of Chimera. All of
Chimera’s executive officers will remain in place. FIDAC will
continue to provide Chimera with infrastructure and personnel
assistance while Chimera transitions fully to its independent
systems.
Credit Suisse is serving as exclusive financial advisor to
Annaly. DLA Piper is legal counsel to Annaly.
Dechert LLP is legal counsel to the independent members of the
Chimera Board.
Additional information is also available in Annaly’s second
quarter 2015 earnings release that is issued today. The earnings
release can be accessed on Annaly’s website:
http://www.annaly.com/investors/news.aspx
Additional information is also available in Chimera’s second
quarter 2015 earnings release that is issued today. The earnings
release can be accessed on Chimera’s website:
http://www.chimerareit.com/investors/news.aspx
About Annaly Capital Management, Inc.
Annaly’s principal business objective is to generate net income
for distribution to its shareholders from its investments. Annaly
is a Maryland corporation that has elected to be taxed as a real
estate investment trust (“REIT”). Annaly is managed and advised by
Annaly Management Company LLC.
About Chimera Investment Corporation
Chimera invests in residential mortgage loans, residential
mortgage-backed securities, real estate-related securities and
various other asset classes. Chimera’s principal business objective
is to generate income from the spread between yields on its
investments and its cost of borrowing and hedging activities.
Chimera is a Maryland corporation that has elected to be taxed as a
REIT.
Other Information
For a discussion of the risks and uncertainties which could
cause actual results to differ from those contained in the
forward-looking statements for Annaly and Chimera, respectively,
see “Risk Factors” in each of Annaly’s and Chimera’s respective
most recent Annual Report on Form 10-K and any subsequent Quarterly
Reports on Form 10-Q. Neither company undertakes, and both
specifically disclaim, any obligation, to publicly release the
result of any revisions which may be made to any forward-looking
statements to reflect the occurrence of anticipated or
unanticipated events or circumstances after the date of such
statements.
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Annaly Capital Management, Inc.Investor Relations,
888-8Annalywww.annaly.comorChimera Investment CorporationInvestor
Relations, 866-315-9930www.chimerareit.com
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