AG Mortgage Investment Trust and Western Asset Mortgage Capital Corporation Announce Definitive Merger Agreement - Seite 2

Compelling Strategic Rationale for MITT and WMC Stockholders

The merger of MITT and WMC is expected to create numerous operational and financial benefits, including:

• Cash Consideration for Stockholders: WMC stockholders will receive a portion of the merger consideration in cash, consisting of a payment from Angelo Gordon, MITT’s external manager, equal to the lesser of $7.0 million and approximately 9.99% of the aggregate per share merger consideration, or $6.9 million in total as of August 7, 2023. Any difference between $7.0 million and the 9.99% will be used to benefit the combined company post-closing by offsetting reimbursable expenses that would otherwise be payable to MITT’s external manager.

• Strong Financial Rationale: Expected accretion to earnings within one year of closing and provide the combined company with an attractive growth profile. The combined company will have a reduced G&A expense ratio and an optimized capital structure, with MITT’s preferred equity reduced to 42% (down from 49%).

• Increased Financial Strength and Flexibility: Strong support and resources from MITT’s external manager, Angelo Gordon, a leading alternative investment firm with $73 billion of assets under management, which includes access to Angelo Gordon’s proprietary, best-in-class securitization platform. The combined company is also expected to benefit from an expanded investor base and enhanced trading liquidity and volume. Notably, for the first year following close, Angelo Gordon will waive $2.4 million of management fees.

• Compelling Strategic Fit: Strategically aligned investment strategies focused on securitizing residential mortgage loans brings the combined company’s investment portfolio to $5.7 billion, consisting of approximately 86% of Non-Agency residential mortgage loans, 5% of Agency RMBS, and 6% of other residential investments. WMC’s legacy commercial investments will only represent approximately 3% of the total investment portfolio on a pro forma basis.

• Enhanced Operational Efficiencies: Significant operating efficiencies of approximately $5-7 million on an annual basis are expected to be realized in the transaction, which is before taking into account the effective resetting of WMC’s management fee and MITT’s external manager waiving $2.4 million in management fees.

Transaction Overview