Capstead Mortgage Corporation Declares August Dividend on Its $1.26 Cumulative Convertible Preferred Stock, Series B and Announces New Conversion Ratios for Its Preferred Stocks

Business Wire, August 4, 2008

DALLAS -- The Board of Directors of Capstead Mortgage Corporation (NYSE: CMO) announced today that it will pay a regular monthly dividend of $0.105 per share on the $1.26 Cumulative Convertible Preferred Stock, Series B (NYSE: CMOPRB). The dividend is payable on August 29 to preferred stockholders of record as of August 18, 2008.

Effective June 30, 2008, each Series B Preferred share is convertible into 0.6025 shares of common stock. Effective July 1, 2008, each Series A Preferred share is convertible into 1.5629 shares of common stock.

Holders of the Series A and B preferred shares may convert into shares of the Company's common stock at any time; however, it is not advantageous to do so at the current market prices of the common and preferred shares. Any conversion requested after one or more preferred record dates within the quarter and on or before the record date for payment of the quarterly common stock dividend will require payment to the Company of all preferred share dividends declared and paid for the corresponding quarter.

Capstead Mortgage Corporation, formed in 1985 and based in Dallas, Texas, is a self-managed real estate investment trust for federal income tax purposes. Capstead's core strategy is managing a leveraged portfolio of residential mortgage pass-through securities consisting almost exclusively of residential adjustable-rate mortgage securities issued and guaranteed by government-sponsored entities, either Fannie Mae or Freddie Mac, or by an agency of the federal government, Ginnie Mae. Agency-guaranteed residential mortgage securities carry an implied AAA credit rating with limited, if any, credit risk. Capstead may also augment its core portfolio with investments in credit-sensitive commercial real estate-related assets.