Annaly Capital Management (NLY) Approves $1B Common Stock Buyback; Announces Internalization of Chimera Management
Annaly Capital Management (NYSE: NLY) announced that its Board of Directors has authorized the repurchase of up to $1 billion of its outstanding common shares through December 31, 2016.
Purchases made pursuant to the program will be made in either the open market or in privately negotiated transactions from time to time as permitted by securities laws and other legal requirements. The timing, manner, price and amount of any repurchases will be determined by the Company in its discretion and will be subject to economic and market conditions, stock price, applicable legal requirements and other factors. The authorization does not obligate the Company to acquire any particular amount of common shares and the program may be suspended or discontinued at the Company’s discretion without prior notice. The Board will assess the effects of this program at its completion.
Annaly and Chimera Investment Corporation (NYSE: CIM) also 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.
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