Annaly Capital Management Inc. said Tuesday it would raise almost $1.3 billion in new equity by selling 75 million shares of common stock at an offering price of $17.20 each — a 3.7% discount to Monday's closing price.

The equity raised by the publicly traded real estate investment trust comes as the mortgage market is on the verge of what could prove a historic restructuring.

Some analysts have predicted that REITs could emerge as big winners because they are not regulated by any federal banking agency.

The New York company said it will use the proceeds to buy mortgage-backed securities in the open market. It also may use the money to pay down debt.

Annaly's core business entails buying MBS issued by Fannie Mae, Freddie Mac and the Federal Home Loan Bank System.

The company has given its underwriters a 30-day option to buy up to an additional 11.25 million shares of common stock.

Credit Suisse Securities is the lead manager on the deal. Barclays Capital Inc., JPMorgan Chase & Co.'s JPMorgan Securities LLC and RCap Securities Inc. also are book-running managers.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.