Capstead Mortgage Corporation Stockholders Approve Merger with Franklin BSP Realty Trust

DALLAS–(BUSINESS WIRE)–Capstead Mortgage Corporation (NYSE: CMO) announced that at its special meeting of stockholders held today, conducted by means of a virtual meeting held live over the internet, Capstead stockholders approved the merger transaction in which Capstead will merge with and into Rodeo Sub I, LLC, a wholly-owned subsidiary of Franklin BSP Realty Trust, Inc., pursuant to the previously announced Agreement and Plan of Merger entered into among Capstead, FBRT, Merger Sub and Benefit Street Partners L.L.C., FBRT’s external manager, on July 25, 2021, and amended on September 22, 2021. At the special meeting, approximately 74.19% of Capstead’s outstanding shares of common stock were voted, with approximately 98.12% of the votes cast in favor of the Capstead merger proposal.

Highlights of the Merger

  • The Merger is expected to close prior to market open on October 19, 2021, subject to customary closing conditions.
  • At the effective time of the Merger, each issued and outstanding share of Capstead Common Stock will be converted into the right to receive (i) from FBRT, 0.3288 newly-issued shares of common stock of FBRT (“FBRT Common Stock”), (ii) from FBRT, cash consideration of $0.21 per share and (iii) from BSP, cash consideration of $0.73 per share. FBRT will pay cash in lieu of any fractional shares of FBRT Common Stock that would otherwise have been received as a result of the Merger.
  • In addition, as a result of the Merger, each outstanding share of Capstead 7.50% Series E Cumulative Redeemable Preferred Stock (“Capstead Series E Preferred Stock”) will be converted into the right to receive one newly-classified share of FBRT 7.50% Series E Cumulative Redeemable Preferred Stock (“FBRT Series E Preferred Stock”).
  • Both Capstead Common Stock and Capstead Series E Preferred Stock are expected to be delisted from trading on the New York Stock Exchange (“NYSE”) after the close of trading on October 18, 2021. FBRT Common Stock and FBRT Series E Preferred Stock are expected to begin trading on the NYSE under the ticker symbols “FBRT” and “FBRT PRE”, respectively, on October 19, 2021.

About Capstead

Formed in 1985 and based in Dallas, Texas, Capstead is a mortgage REIT that earns income from investing in a leveraged portfolio of residential adjustable-rate mortgage pass-through securities, referred to as ARM securities, issued and guaranteed by government-sponsored enterprises, either Fannie Mae or Freddie Mac, or by an agency of the federal government, Ginnie Mae.