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

DALLAS -- 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:CMOPRB). The dividend is payable on August 31 to preferred stockholders of record as of August 18, 2006.

Effective June 30, 2006, each Series B Preferred share is convertible into 0.5951 shares of common stock. Effective July 1, 2006, each Series A Preferred share is convertible into 1.5436 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; however, it is not currently advantageous to do so at the current market prices of the common and preferred shares. Any conversion requested after one or more preferred record dates within the quarter 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. These investments primarily consist of, but are not limited to, residential adjustable-rate mortgage securities issued and guaranteed by government-sponsored entities, either Fannie Mae or Freddie Mac, or by an agency of the federal government, Ginnie Mae. Capstead also seeks to opportunistically invest a portion of its investment capital in credit-sensitive commercial real estate-related assets, including subordinate commercial real estate loans.