Summary
On December 14, 2023, Ellington Financial Inc. (NYSE: EFC) (“EFC”) acquired Arlington Asset Investment Corp. (“AAIC”) (the “Merger”). EFC is a real estate investment trust investing in a diverse array of financial assets including residential and commercial mortgage loans, and is externally managed by Ellington Financial Management LLC (the “Manager”), an affiliate of Ellington Management Group, L.L.C.
The Ellington Financial Inc. website Home page can be found here.
The Ellington Financial Inc. Investors page can be found here.
Each share of AAIC common stock (NYSE: AAIC) issued and outstanding immediately prior to the Merger was automatically converted into the right to receive: (i) 0.3619 shares of EFC common stock; and (ii) $0.09 in cash (together, the “Merger Consideration”). Cash was paid in lieu of any fractional shares of EFC common stock that would otherwise have been received as a result of the Merger.
Each share of AAIC’s 7.00% Series B Cumulative Perpetual Redeemable Preferred Stock (NYSE: AAIC PrB) was automatically converted into the right to receive one newly issued share of 7.00% Series D Cumulative Perpetual Redeemable Preferred Stock of EFC (NYSE: EFC PRD); and each share of AAIC’s 8.250% Series C Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock (NYSE: AAIC PrC) was automatically converted into the right to receive one newly issued share of 8.250% Series E Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock of EFC (NYSE: EFC PRE).
At the time of the Merger, the AAIC common and preferred shares were delisted from the NYSE.
If you owned some or all of your AAIC shares through a financial institution or broker, those shares have been automatically exchanged for shares of common stock of EFC and the per share portion of a cash payment from the Manager. Please contact your financial institution or broker directly if you have any questions regarding the merger consideration you received.
If you owned some or all of your AAIC shares directly through a book-entry registered position, Equiniti Trust Company, LLC, the exchange agent, has issued and distributed the shares of EFC in book-entry form, referred to as Direct Registration, in lieu of a paper certificate, to an account maintained at Equiniti Trust Company, LLC on your behalf. Equiniti Trust Company, LLC has issued or will issue a statement representing your EFC shares along with the cash consideration and a check for fractional shares to the address on record.
Please contact EFC’s exchange agent, Equiniti Trust Company, LLC, at (718) 921-8317 or toll-free at (877) 248-6417 if you have any questions about receiving the Merger Consideration.
A subsidiary of EFC assumed all of AAIC’s covenants, agreements and obligations under and relating to these securities. As a result, the trust preferred securities are now obligations of this subsidiary of EFC.
A subsidiary of EFC assumed all of AAIC’s covenants, agreements and obligations under and relating to AAIC’s 6.75% Senior Notes due 2025 (NYSE: AIC) (the “2025 Notes”) and to AAIC’s 6.000% Senior Notes due 2026 (NYSE: AAIN) (the “2026 Notes”). As a result, the 2025 Notes and 2026 Notes are now obligations of this subsidiary of EFC.
The 2025 Notes and the 2026 Notes have been delisted from the NYSE.
Holders of AAIC common and preferred stock should also consult their tax advisors to determine the tax consequences to them (including the application and effect of any state, local or non-US income and other tax laws) of the Merger and the ownership and disposition of shares of EFC common or preferred stock.
Holders of AAIC common and preferred stock should consult Form 8937, available here, for the federal income tax treatment of the merger.