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Two Harbors Investment Corp. Prices Public Offering of Series B Preferred Stock

TWO | July 12, 2017

Two Harbors Investment Corp. Prices Public Offering of Series B Preferred Stock

Two Harbors Investment Corp. (NYSE: TWO) announced today the pricing of its underwritten public offering of 10,000,000 shares of its 7.625% Series B Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock (the “Series B Preferred Stock”), liquidation preference $25.00 per share, for gross proceeds of approximately $250 million, before deducting the underwriting discount and other estimated offering expenses. The company also granted the underwriters of the offering a 30-day option to purchase up to an additional 1,500,000 shares of Series B Preferred Stock to cover over-allotments, if any. The offering is expected to close on or about July 19, 2017, subject to customary closing conditions. The company intends to apply to list the Series B Preferred Stock on the New York Stock Exchange under the symbol “TWO PRB”.

Dividends on the Series B Preferred Stock will accumulate and be payable from and including the date of original issue to, but not including July 27, 2027, at a fixed rate of 7.625% per annum of the $25.00 liquidation preference. On and after July 27, 2027, dividends on the Series B Preferred Stock will accumulate and be payable at a percentage of the $25.00 liquidation preference equal to an annual floating rate of three-month LIBOR plus a spread of 5.352% per annum.

The company intends to use the net proceeds from the offering to purchase its target assets, including residential mortgage-backed securities, mortgage servicing rights and other financial assets, in each case subject to its investment guidelines and to the extent consistent with maintaining its real estate investment trust qualification, and for general corporate purposes. The company does not intend to use any proceeds of this offering to acquire the target investments of Granite Point Mortgage Trust Inc., its majority-owned subsidiary.

Morgan Stanley & Co. LLC, UBS Securities LLC, J.P. Morgan Securities LLC and Keefe, Bruyette & Woods, Inc. are acting as joint book-running managers for the offering.

The offering will be made pursuant to the company’s shelf registration statement previously filed with the Securities and Exchange Commission (“SEC”) on May 15, 2015 (Commission File No. 333-204216). The offering will be made only by means of a prospectus supplement and an accompanying prospectus. Before you invest, you should read the prospectus supplement and accompanying prospectus along with other documents that the company has filed with the SEC for more complete information about the company and this offering. Copies of the preliminary prospectus supplement and accompanying prospectus, when available, may be obtained by contacting:

Morgan Stanley & Co. LLC

180 Varick Street

New York, New York 10014

Attention: Prospectus Department

Or by telephone at (800) 584-6837

UBS Securities LLC

1285 Avenue of the Americas

New York, New York 10019

Attention: Prospectus Department

Or by telephone at (888) 827-7275

J.P. Morgan Securities LLC

383 Madison Avenue

New York, New York 10179

Attention: Investment Grade Syndicate

Or by telephone at (212) 834-4533 (collect)

Keefe, Bruyette & Woods, Inc.

787 Seventh Avenue, 4th Floor

New York, New York 10019

Attention: Capital Markets

Or by telephone at (800) 966-1559

This press release shall not constitute an offer to sell, or a solicitation of an offer to buy, shares of preferred stock, or any other securities, nor shall there be any sale of the company’s securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

Two Harbors Investment Corp.
Two Harbors Investment Corp., a Maryland corporation, is a real estate investment trust that invests in residential mortgage-backed securities, mortgage servicing rights and other financial assets. Two Harbors is headquartered in New York, New York, and is externally managed and advised by PRCM Advisers LLC, a wholly owned subsidiary of Pine River Capital Management L.P.

Cautionary Notice Regarding Forward-Looking Statements
This release may include statements and information that constitute “forward-looking statements” within the meaning of section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended, and we intend such forward-looking statements to be covered by the safe harbor provisions therein and are included in this statement for purposes of invoking these safe harbor provisions. Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, targets, expectations, anticipations, assumptions, estimates, intentions and future performance. The forward-looking statements made in this release include, but may not be limited to, expectations regarding the use of proceeds from the offering.

Forward-looking statements are not guarantees, and they involve risks, uncertainties and assumptions. There can be no assurance that actual results will not differ materially from our expectations. We caution investors not to rely unduly on any forward-looking statements and urge you to carefully consider the risks identified under the captions “Risk Factors,” “Forward-Looking Statements” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our public filings with the SEC, which are available on the SEC’s website at www.sec.gov.

All written or oral forward-looking statements that we make, or that are attributable to us, are expressly qualified by this cautionary notice. Except to the extent required by applicable laws and regulations, we undertake no obligations to update these forward-looking statements to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.