Ellington Financial Inc, a REIT invests in residential and commercial mortgage loans, and Arlington Asset Investment Corp, a REIT invests primarily in mortgage-related assets, have entered into a definitive merger agreement with Ellington Financial acquiring Arlington.  

The deal is expected to result in Ellington Financial having a pro forma equity capital base of over $1.5 billion. Upon completion, Ellington Financial stockholders will own approximately 85% of the combined company, while Arlington stockholders will own approximately 15%. The merged company will operate under “Ellington Financial Inc.” and continue trading on the NYSE under the “EFC” ticker.  

“We believe that the benefits of this acquisition include greater operating efficiencies, a larger market capitalization, and attractive long-term unsecured debt and preferred equity capital,” said Laurence Penn, Ellington Financial’s chief executive officer.