Capstead Mortgage Corporation Announces Exercise of Underwriters' Over-Allotment Option Related to Its Recently Closed Public Offering

Capstead Mortgage Corporation (NYSE:CMO) announced today that the underwriters of its recent public offering of 8 million shares of common stock, which closed on November 21, 2007, have exercised in full their option to purchase 1.2 million additional shares at the public offering price of $10.73 per share less underwriting discounts and commissions. Capstead expects to receive aggregate net proceeds of approximately $12.2 million from the sale of the additional shares, which would bring aggregate net proceeds of the offering to approximately $93.5 million after underwriting discounts, commissions and estimated offering expenses. Capstead expects to close the sale of additional shares on or about Thursday, November 29, 2007 subject to the satisfaction of customary closing conditions. Capstead intends to use the net proceeds from the sale of additional shares to finance purchases of additional adjustable-rate mortgage, or ARM, Fannie-Mae, Freddie Mac or Ginnie Mae-guaranteed residential mortgage-backed securities, on a leveraged basis, and for general corporate purposes. Bear, Stearns & Co. Inc., Keefe, Bruyette & Woods, Inc. and JMP Securities LLC acted as joint book-running managers for the offering. RBC Capital Markets acted as a co-manager. Information about the offering is available in the prospectus supplement and the accompanying prospectus of the offering filed with the Securities and Exchange Commission. Copies of the prospectus supplement and the accompanying prospectus can be obtain from Bear, Stearns & Co. Inc., 383 Madison Avenue, New York, New York 10179, Attention: Prospectus Department (telephone number: 631-274-8321). All of the shares are being offered by Capstead from its existing shelf registration statement. This press release shall not constitute an offer to sell or a solicitation of an offer to buy shares of common stock, nor shall there be any sale of shares of common stock in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. About Capstead Capstead Mortgage Corporation, formed in 1985 and based in Dallas, Texas, is a self-managed real estate investment trust for federal income tax purposes. Capstead's core strategy is managing a leveraged portfolio of residential mortgage securities consisting primarily of ARM securities issued and guaranteed by government-sponsored entities, either Fannie Mae or Freddie Mac, or by an agency of the federal government, Ginnie Mae, which the Company refers to collectively as agency securities. Agency securities carry an actual or implied AAA credit rating with limited, if any, credit risk. Capstead may also augment its core portfolio with investments in credit-sensitive commercial real estate-related assets.