Annaly Capital Management, Inc. (NYSE:NLY) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.

On January8, 2018, Annaly Capital Management, Inc. (the “Company”) and Annaly Management Company LLC entered into an underwriting agreement (the “Underwriting Agreement”) with Merrill Lynch, Pierce, Fenner& Smith Incorporated, as representative of the several underwriters named therein (the “Underwriters”), relating to (i)the offer and sale of 17,000,000 shares of its 6.50% Series G Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock, par value $0.01 per share (the “Series G Preferred Stock”), and (ii)the grant by the Company to the Underwriters of an option to purchase up to an additional 2,550,000 shares of Series G Preferred Stock (together, the “Shares”). The offering closed on January12, 2018. The Underwriting Agreement is filed as Exhibit 1.1 to this Current Report on Form 8-K and the description of the Underwriting Agreement contained herein is qualified in its entirety by reference to such exhibit.

The offering is being conducted to the Company’s Registration Statement on Form S-3 (File No.333-209447). The offering was made to the prospectus supplement, dated January8, 2018, and the accompanying prospectus, dated February9, 2016, filed with the Securities and Exchange Commission to Rule 424(b) of the Securities Act of 1933, as amended.

A copy of the opinion of Venable LLP relating to the legality of the issuance and sale of the Shares is attached to this Current Report on Form 8-K as Exhibit 5.1. A copy of the opinion of Hunton& Williams LLP with respect to certain tax matters is attached to this Current Report on Form 8-K as Exhibit 8.1.

On January10, 2018, the Company filed, with the State Department of Assessments and Taxation of the State of Maryland (the “SDAT”), Articles Supplementary (the “Series G Articles Supplementary”) to the Articles of Amendment and Restatement of the Articles of Incorporation of the Company, as amended and supplemented, classifying and designating 19,550,000 shares of the Company’s authorized common stock, par value $0.01 per share (“Common Stock”), as the Series G Preferred Stock, with the powers, designations, preferences and other rights as set forth therein.

The Series G Articles Supplementary, among other things, provide that the Company will pay cumulative cash dividends on the Series G Preferred Stock when and as declared by the Company’s Board of Directors. The initial dividend rate for the Series G Preferred Stock, from and including January12, 2018, to but not including March31, 2023, will be equal to 6.50% per annum of the $25.00 liquidation preference per share (equivalent to the fixed annual rate of $1.625 per share). On and after March31, 2023, dividends on the Series G Preferred Stock will accumulate at a percentage of the $25.00 liquidation preference equal to an annual floating rate of the three-month LIBOR plus a spread of 4.172% per annum. Dividends on the Series G Preferred Stock will be payable quarterly in arrears on the last day of each March, June, September and December, when and as declared, beginning on March31, 2018 (provided that if any dividend payment date is not a business day, then the dividend which would otherwise have been payable on that dividend payment date may be paid on the next succeeding business day).

The Series G Preferred Stock ranks senior to the Common Stock, with respect to the payment of dividends and rights upon the voluntary or involuntary liquidation, dissolution or winding up of the Company.

The Series G Preferred Stock will not be redeemable before March31, 2023, except under certain limited circumstances intended to preserve the Company’s qualification as a real estate investment trust (“REIT”) and except upon the occurrence of a Change of Control (as defined in the Series G Articles Supplementary). On or after March31, 2023, the Company may, at its option, redeem, in whole or in part, at any time or from time to time, the Series G Preferred Stock at redemption price of $25.00 per share, plus any accumulated and unpaid dividends thereon (whether or not authorized or declared) to, but excluding, the redemption date. In addition, upon the occurrence of a Change of Control, the Company may, at its option, redeem some or all of the shares of Series G Preferred Stock, in whole or in part, within 120 days after the first date on which such Change of Control occurred at $25.00 per share plus any accumulated and unpaid dividends to, but excluding, the redemption date. The Series G Preferred Stock has no stated maturity, is not subject to any sinking fund or mandatory redemption and will remain outstanding indefinitely unless repurchased or redeemed by the Company or converted into Common Stock in connection with a Change of Control by the holders of Series G Preferred Stock.

Upon the occurrence of a Change of Control, each holder of Series G Preferred Stock will have the right (subject to the Company’s election to redeem the Series G Preferred Stock in whole or in part, as described above, prior to the Change of Control Conversion Date (as defined in the Series G Articles Supplementary)) to convert some or all of the Series G Preferred Stock held by such holder on the Change of Control Conversion Date into a number of shares of the Common Stock per share of Series G Preferred Stock determined by formula, in each case, on the terms and subject to the conditions described in the Series G Articles Supplementary, including provisions for the receipt, under specified circumstances, of alternative consideration.

There are restrictions on ownership of the Series G Preferred Stock intended to preserve the Company’s qualification as a REIT. Holders of Series G Preferred Stock generally have no voting rights, but have limited voting rights if the Company fails to pay dividends for six or more full quarterly dividend periods (whether or not consecutive) and under certain other circumstances.

A copy of the Series G Articles Supplementary and Form of Series G Preferred Stock Certificate are filed as Exhibits 3.1 and 4.1, respectively, to this Current Report on Form 8-K and incorporated herein by reference. The description of the terms of the Series G Articles Supplementary in this Item 1.01 is qualified in its entirety by reference to Exhibit 3.1.

The information about the Series G Articles Supplementary set forth under Item 1.01 of this Current Report on Form 8-K is hereby incorporated by reference into this Item 1.01.

ANNALY CAPITAL MANAGEMENT INC Exhibit
EX-1.1 2 d526030dex11.htm EX-1.1 EX-1.1 Exhibit 1.1 EXECUTION VERSION ANNALY CAPITAL MANAGEMENT,…
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About Annaly Capital Management, Inc. (NYSE:NLY)

Annaly Capital Management, Inc. (Annaly) is a mortgage real estate investment trust (REIT). The Company’s principal business objectives are to generate net income for distribution to its stockholders from its investments and capital preservation. Its portfolio also includes residential credit investments, such as credit risk transfer securities and non-agency mortgage-backed securities. Its business operations primarily consist of Annaly Commercial Real Estate Group, Inc. (ACREG), which specializes in originating or acquiring, financing and managing commercial loans and other commercial real estate debt, commercial mortgage-backed securities and other commercial real estate-related assets; Annaly Middle Market Lending LLC (MML), which engages in corporate middle market lending transactions, and RCap Securities, Inc. (RCap), which operates as a broker-dealer, and is a member of the Financial Industry Regulatory Authority (FINRA). It is managed by Annaly Management Company LLC.