Profile: Capstead Mortgage Corporation (CMO.N)

Capstead Mortgage Corporation (Capstead) operates as a self-managed real estate investment trust (REIT). The Company earns income from investing in real estate-related assets on a leveraged basis. These investments consist primarily of a portfolio of residential adjustable-rate mortgage (ARM) securities issued and guaranteed by government-sponsored entities, either Federal National Mortgage Association (Fannie Mae) or Federal Home Loan Mortgage Corporation (Freddie Mac), or by an agency of the federal government, Government National Mortgage Association (Ginnie Mae) (collectively, Agency Securities).

As of December 31, 2008, residential mortgage investments totaled $7.46 billion. As of December 31, 2008, the Company’s investments in commercial real estate-related assets consisted of $5 million in subordinated loans to a Dallas, Texas-based developer to be repaid through townhome and land sales, and $38 million in subordinated loans collateralized by a Four Seasons hotel in the Nevis West Indies that matured October 9, 2008. Capstead finances a majority of its holdings of residential mortgage securities with commercial banks and other financial institutions using repurchase arrangements supported by the Company’s long-term investment capital.