A Maryland real estate investment trust that invests in mortgage-backed securities is planning to raise up to $1.8 billion in a stock sale.

American Capital Agency in Bethesda said in a news release last week that it intends to use the proceeds from the secondary offering to buy up additional securities, as well as for general corporate purposes.

The stock sale, expected to close Monday, would be at the least the REIT's seventh secondary offering since going public in 2008, the Washington Business Journal reported last week. Its most recent secondary offering was in October, when it raised $1 billion.

American Capital Agency invests only in securities backed by government-sponsored enterprises Fannie Mae, Freddie Mac and Ginnie Mae.

Speaking a conference in New York last week, President and Chief Investment Officer Gary Kain told investors and analysts that now is a good time to invest in the securities because yields are likely to increase as the economy improves. Even if conditions worsen and the Federal Reserve Board has to stimulate the economy with another round of bond purchases, American Capital could see a "big pop" in its book value by selling securities to the Fed, Kain said.

"The Fed is going to buy hundreds of billions of dollars worth of agency mortgages, which is what we own," said Kain at the conference hosted by Citgroup Inc.

American Capital said it would issue 62.1 million shares in the offering. It did not disclose an offering price, but the shares have been trading between $29 and $30 for most of the past month.

American Capital said that underwriters would be granted a 30-day option to buy up to 9.1 million shares to cover any overallotments.

Ban of America Merrill Lynch, Citigroup Inc., Goldman, Sachs & Co., J.P. Morgan Securities LLC and UBS Securities LLC are joint book-running managers for the offering. Barclays Capital and Nomura Securities International, Inc. are co-lead managers for the offering.

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