Ellington Financial Announces REIT Conversion and Closing of Exchange Offer

OLD GREENWICH, Conn.–(BUSINESS WIRE)–Ellington Financial LLC (NYSE: EFC) (“Ellington Financial” or the
“Company”) announced today that it plans to elect to be taxed as a REIT
for U.S. federal income tax purposes for the taxable year ending
December 31, 2019. To facilitate this planned election, it has elected
to be taxed as a corporation for U.S. federal income tax purposes
effective as of January 1, 2019.

I am excited that we completed our tax conversion from a publicly
traded partnership,” said Laurence Penn, Chief Executive Officer and
President. “Our tax reporting to investors will be greatly simplified as
a REIT, which should expand our investor base and greatly improve the
liquidity of our stock.”

The Company will issue a final Schedule K-1 to shareholders who held
shares in 2018. For 2019, the Company will issue a Form 1099 to
shareholders reporting all dividends paid.

The Company also announced today that it has closed on its exchange
offer relating to its 5.25% Senior Notes due September 1, 2022 (the
“Existing Notes”). All $86,000,000 of the outstanding principal amount
of the Existing Notes were exchanged for an equal principal amount of a
new issue of 5.50% Senior Notes due September 1, 2022 (the “New Notes”),
issued by the Company’s subsidiaries EF Holdco Inc. and EF Cayman
Holdings Ltd. along with other Company subsidiaries that may be added as
issuers, and guaranteed by the Company. The Company’s election to be
taxed as a corporation for U.S. federal income tax purposes, which was
made in connection with its plan to elect to be taxed as a REIT, was a
condition to the closing.

The New Notes have not been registered under the Securities Act or any
state securities laws, and, unless so registered, may not be offered or
sold in the United States except pursuant to an applicable exemption
from the registration requirements of the Securities Act and applicable
state securities laws. The exchange offer was not made to holders of
Existing Notes in any jurisdiction in which the making or acceptance
thereof would not be in compliance with the securities, blue sky or
other laws of such jurisdiction. This press release does not constitute
an offer to sell or the solicitation of an offer to purchase any

Cautionary Statement Regarding Forward-Looking Statements

This press release contains forward-looking statements within the
meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements involve
numerous risks and uncertainties. Actual results may differ from the
Company’s beliefs, expectations, estimates, and projections and,
consequently, you should not rely on these forward-looking statements as
predictions of future events. Forward-looking statements are not
historical in nature and can be identified by words such as “believe,”
“expect,” “anticipate,” “estimate,” “project,” “plan,” “continue,”
“intend,” “should,” “would,” “could,” “goal,” “objective,” “will,”
“may,” “seek,” or similar expressions or their negative forms, or by
references to strategy, plans, or intentions. Examples of
forward-looking statements in this press release include, without
limitation, statements regarding the Company’s planned REIT election and
tax reporting, and statements regarding the potential benefits of
converting to a REIT. The Company’s results can fluctuate from month to
month and from quarter to quarter depending on a variety of factors,
some of which are beyond the Company’s control and/or are difficult to
predict, including, without limitation, changes in interest rates and
the market value of the Company’s securities, changes in mortgage
default rates and prepayment rates, the Company’s ability to borrow to
finance its assets, changes in government regulations affecting the
Company’s business, the Company’s ability to maintain its exclusion from
registration under the Investment Company Act of 1940, the Company’s
ability to qualify and maintain its qualification as a real estate
investment trust, or “REIT,” and other changes in market conditions and
economic trends. Furthermore, forward-looking statements are subject to
risks and uncertainties, including, among other things, those described
under Item 1A of the Company’s Annual Report on Form 10-K filed on
March 15, 2018 which can be accessed through the Company’s website at
or at the SEC’s website (
Other risks, uncertainties, and factors that could cause actual results
to differ materially from those projected or implied may be described
from time to time in reports the Company’s files with the SEC, including
reports on Forms 10-Q, 10-K and 8-K. The Company undertakes no
obligation to update or revise any forward-looking statements, whether
as a result of new information, future events, or otherwise.

About Ellington Financial

Ellington Financial invests in a diverse array of real-estate-related
and other financial assets, including residential and commercial
mortgage-backed securities, residential and commercial mortgage loans,
consumer loans and asset-backed securities backed by consumer loans,
collateralized loan obligations, non-mortgage and mortgage-related
derivatives, equity investments in loan origination companies, and other
strategic investments. Ellington Financial is externally managed and
advised by Ellington Financial Management LLC, an affiliate of Ellington
Management Group, L.L.C.


Ellington Financial
Investor Relations, 203-409-3575
& Co., for Ellington Financial
Amanda Klein / Kevin FitzGerald,

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