Capstead Declares May Dividend on Its $1.26 Cumulative Convertible Preferred Stock, Series B and Announces New Conversion Ratios for Its Preferred Stocks.

Business Editors

DALLAS--(BUSINESS WIRE)--May 6, 2004

The Board of Directors of Capstead Mortgage Corporation (NYSE:CMO) announced today that it will pay a regular monthly dividend of $0.105 per share on the $1.26 Cumulative Convertible Preferred Stock, Series B (NYSE:CMOpB). The dividend is payable on May 28 to preferred stockholders of record as of May 18, 2004.

Effective March 31, 2004, each Series B Preferred share is convertible into 0.5742 shares of common stock; however, it is not currently advantageous to do so at the current market prices of both the common and Series B preferred shares. Effective April 1, 2004, each Series A Preferred share is convertible into 1.4901 shares of common stock.

Holders of the Series A and B preferred shares may convert into shares of the Company's common stock at any time. Any conversion requested after one or more preferred record dates and on or before the record date for payment of the quarterly dividend on the common shares, will require the payment to the Company of all such preferred share dividends declared and paid for the corresponding quarter.

Capstead Mortgage Corporation operates as a real estate investment trust earning income from investing in real estate-related assets on a leveraged basis and from other investment strategies.