Shares of American Capital Agency Corp. are expected to begin trading Thursday after the real estate investment trust's initial public offering of 10 million shares priced at $20 per share, raising gross proceeds of $200 million.
Concurrently, private equity fund American Capital Strategies Ltd. has agreed to buy $100 million, or 5 million shares, of the company's stock in a private placement.
American Capital Agency will be externally managed and advised by an American Capital Strategies portfolio company.
Originally, the company had expected to offer 12.5 million shares to the public for $20 apiece, and sell 2.5 million shares to American Capital Strategies in a private placement.
American Capital Agency plans to use all of the proceeds from the IPO to invest in single-family residential mortgage pass-through securities and collateralized mortgage obligations guaranteed by a U.S. government agency or a U.S. government-sponsored entity.
American Capital Agency said in its prospectus with the Securities and Exchange Commission that it expects financing of agency securities to continue to be available on favorable terms, despite turmoil in the residential mortgage market.
Citi and Merrill Lynch & Co. served as lead underwriters. American Capital Agency has granted the underwriters an overallotment option to buy up to 1.5 million additional shares at the IPO price to cover any overallotments.
The offering is expected to close on May 20.
Shares will trade on the Nasdaq Global Market under the symbol "AGNC."
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