Annaly Capital Offers New 8.875% Fixed-Rate Preferred Series J

Annaly Capital Management has launched a new 8.875% fixed-rate preferred stock, Series J, offering income investors a high-yield option. Mortgage REIT preferred stocks are popular for their high yields, making them an attractive option for those seeking income. The new Series J preferred stock is a fixed-rate offering, providing investors with a predictable return on investment.

Title: Annaly Capital Management Launches High-Yield Fixed-Rate Preferred Stock

Annaly Capital Management (NLY) has recently introduced a new preferred stock, Series J, offering income investors a high-yield option. This 8.875% fixed-rate preferred stock is part of a growing trend in the mortgage REIT sector, where preferred stocks are valued for their high yields and relatively low risk profile [2].

The new Series J preferred stock represents a significant move by Annaly Capital, which has been known for its strategic approach to managing interest rates and capital structure. The issuance of this fixed-rate preferred stock is part of a broader effort to diversify its preferred stock offerings and manage its interest rate exposure more effectively [2].

Mortgage REITs, or mortgage real estate investment trusts, have long been attractive to income investors due to their high dividend yields. The preferred stock offerings from these companies often provide a stable and predictable income stream. The Series J preferred stock from Annaly Capital is no exception, offering investors a fixed coupon rate of 8.875% [2].

The decision to issue a fixed-rate preferred stock rather than a floating-rate one is notable. Fixed-rate preferreds provide a predictable return, which can be appealing to investors seeking stable income. In contrast, floating-rate preferreds are more sensitive to interest rate changes and can offer varying levels of income over time [2].

The issuance of the Series J preferred stock is also significant from a capital structure perspective. Annaly Capital has been increasing its equity/preferred coverage ratio by issuing more common shares, which in turn has allowed it to issue preferred stocks at higher yields. This move reflects the company's strategy to balance its capital structure and manage its risk profile more effectively [2].

Investors should consider several factors when evaluating the Series J preferred stock. The fixed-rate nature of the stock provides a predictable income stream, but it also means that the stock's value will be less sensitive to changes in interest rates. The 5-year call protection period also provides investors with some level of security, as the stock cannot be redeemed by the company within this period [2].

In conclusion, Annaly Capital Management's Series J preferred stock offers income investors a high-yield option with a fixed-rate coupon. While the fixed-rate nature of the stock provides a predictable income stream, investors should also consider the stock's call protection period and its impact on the company's capital structure. As with any investment, it is essential to conduct thorough research and consider one's own financial goals and risk tolerance before making a decision.

References:
[1] https://www.theglobeandmail.com/investing/markets/stocks/NLY/pressreleases/34011666/annaly-capital-completes-series-j-preferred-stock-sale/
[2] https://seekingalpha.com/article/4813480-annaly-capital-new-preferred-from-mortgage-reit