Capstead Mortgage Corporation Announces Public Offering of Common Stock

Capstead Mortgage Corporation (NYSE: CMO) announced today that it plans to make a public offering of 6,500,000 shares of its common stock. Capstead has granted the underwriters a 30-day option to purchase up to an additional 975,000 shares of common stock to cover over-allotments. All of the shares are being offered by Capstead. Capstead expects to use the net proceeds from this offering to finance purchases of additional adjustable-rate mortgage, or ARM, Fannie Mae, Freddie Mac or Ginnie Mae-guaranteed residential mortgage-backed securities, on a leveraged basis, and for general corporate purposes. Bear, Stearns & Co. Inc. and Deutsche Bank Securities Inc. are acting as joint book-running managers for the offering, with Keefe, Bruyette & Woods, Inc. and JMP Securities LLC acting as co-managers. The offering will be made under Capstead’s existing shelf registration statement filed with the Securities and Exchange Commission. This press release shall not constitute an offer to sell or a solicitation of an offer to buy shares of common stock, nor shall there be any sale of shares of common stock in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. When available, copies of the prospectus supplement and accompanying prospectus may be obtained from Bear, Stearns & Co. Inc., 383 Madison Avenue, New York, New York 10179, Attention: Prospectus Department (telephone number: 631-274-8321) or Deutsche Bank Securities Inc., 100 Plaza One, Jersey City, NJ 07311, Attention: Prospectus Department (telephone number: 1-800-503-4611; email: prospectusrequest@list.db.com). About Capstead Capstead Mortgage Corporation, formed in 1985 and based in Dallas, Texas, is a self-managed real estate investment trust for federal income tax purposes. Capstead’s core strategy is managing a leveraged portfolio of residential mortgage securities consisting almost exclusively of ARM securities issued and guaranteed by government-sponsored entities, either Fannie Mae or Freddie Mac, or by an agency of the federal government, Ginnie Mae. Agency-guaranteed securities carry an actual or implied AAA credit rating with limited, if any, credit risk. Capstead may also augment its core portfolio with investments in credit-sensitive commercial real estate-related assets. Forward-looking Statements This document contains "forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995) that inherently involve risks and uncertainties. Capstead’s actual results and liquidity can differ materially from those anticipated in these forward-looking statements because of changes in the level and composition of the Company’s investments and unforeseen factors. As discussed in the Company’s filings with the Securities and Exchange Commission, these factors may include, but are not limited to, changes in general economic conditions, the availability of suitable qualifying investments from both an investment return and regulatory perspective, the availability of new investment capital, fluctuations in interest rates and levels of mortgage prepayments, deterioration in credit quality and ratings, the effectiveness of risk management strategies, the impact of leverage, liquidity of secondary markets and credit markets, increases in costs and other general competitive factors. In addition to the above considerations, actual results and liquidity related to investments in loans secured by commercial real estate are affected by borrower performance under operating and/or development plans, lessee performance under lease agreements, changes in general as well as local economic conditions and real estate markets, increases in competition and inflationary pressures, changes in the tax and regulatory environment including zoning and environmental laws, uninsured losses or losses in excess of insurance limits and the availability of adequate insurance coverage at reasonable costs, among other factors.