Annaly Capital Management, Inc. Announces Agreement to Sell Its Middle Market Lending Portfolio to Ares Management Corporation for $2.4 Billion

Annaly Capital Management, Inc. (NYSE: NLY) (“Annaly” or the “Company”) today announced that it has entered into a definitive agreement to sell its Middle Market Lending portfolio to Ares Capital Management LLC on behalf of funds managed by the Credit Group of Ares Management Corporation (NYSE: ARES) (“Ares”), a leading global alternative investment manager. The transaction is valued at approximately $2.4 billion and represents substantially all of the Company’s Middle Market Lending assets held on balance sheet as well as assets managed for third parties. The Company’s Middle Market Lending portfolio is comprised of predominantly 1^st and 2^nd lien loans focused on defensive, counter-cyclical industries.

“The sale of our Middle Market Lending portfolio represents a successful outcome for Annaly’s shareholders and marks the latest in a series of strategic actions – including the disposition of our Commercial Real Estate business and investments into our Mortgage Servicing Rights and Residential Credit businesses – that have enhanced our focus and capabilities across our core housing finance strategy,” remarked David Finkelstein, Annaly’s Chief Executive Officer & President.

Annaly expects the transaction to be accretive to book value and have an immaterial impact on other key financial metrics, including earnings available for distribution and the Company’s dividend. Upon closing of the transaction, the Company intends to use proceeds from the sale to repay its financing facilities related to the Middle Market Lending assets being sold and to purchase targeted assets in accordance with its capital allocation policy, including Agency MBS, Mortgage Servicing Rights and Residential Credit assets.

Subject to customary closing conditions, the transfer of the Middle Market Lending portfolio is expected to be completed by the end of the second quarter of 2022.

Wells Fargo Securities, LLC is serving as financial advisor and Hunton Andrews Kurth LLP is serving as legal advisor to Annaly. Latham & Watkins LLP is serving as legal advisor to Ares.

About Annaly

Annaly is a leading diversified capital manager with investment strategies across mortgage finance. Annaly’s principal business objective is to generate net income for distribution to its stockholders and to optimize its returns through prudent management of its diversified investment strategies. Annaly is internally managed and has elected to be taxed as a real estate investment trust, or REIT, for federal income tax purposes. Additional information on the company can be found at www.annaly.com.