Dynex Capital Expands At-the-Market Offering Capacity by 80 Million Shares

Mortgage REIT Distribution Agreement Expanded to Support Capital Access

Dynex Capital, a mortgage real estate investment trust incorporated in Virginia and headquartered in Glen Allen, Virginia, disclosed a material amendment to its at-the-market offering program on July 28, 2026. The company, which trades on the New York Stock Exchange under the ticker DX for common shares and DX-PC for its Series C cumulative redeemable preferred stock, has routinely adjusted its share authorization levels through amendments to its distribution agreement since the initial execution in June 2018. This latest amendment represents the tenth modification to the original distribution framework and reflects the company's ongoing strategy to maintain adequate liquidity channels for raising capital through varying market environments.

The distribution agreement framework enables Dynex Capital to offer and sell its common stock through at-the-market transactions, a mechanism that permits the company to issue shares incrementally through its designated sales agents at prevailing market prices rather than through a single large offering. This structure has proven beneficial for REITs and other capital-intensive businesses seeking steady access to equity markets without the timing constraints of traditional offerings. By maintaining a substantial authorized pool of shares available for issuance, Dynex Capital positions itself to respond flexibly to refinancing needs, acquisitions, or other capital deployment opportunities that may arise during market cycles favorable to equity issuance.

Share Authorization Increase and Remaining Capacity Under Amendment No. 10

Amendment No. 10, which became effective on July 28, 2026, increased the total number of common shares available for sale under the distribution agreement by 80 million shares. Following this amendment, the aggregate authorization under the Amended Agreement reached 301,292,973 shares of common stock, representing a cumulative expansion since the agreement's inception in 2018. Of this total authorization, the company disclosed that 99,326,438 shares remain available for issuance and future distribution through its sales agents, meaning that approximately 32.9 percent of the total authorized capacity remains undrawn under the program.

This remaining availability of nearly 99.3 million shares provides Dynex Capital with substantial dry powder for capital raises over an extended period, assuming normal market conditions and proportional utilization rates. The filing does not disclose the rate at which the company has historically drawn down share capacity under previous amendments, nor does it specify any timeline or targets for utilizing the newly authorized shares. Investors monitoring Dynex Capital may find the balance between total authorization and remaining availability significant, as it indicates how aggressively the company may be deploying its at-the-market capacity and whether future amendments may be required in the near term.

Registration Statement Framework and Prospectus Filing

The shares authorized under Amendment No. 10 are being offered pursuant to Dynex Capital's Registration Statement on Form S-3 filed with the Securities and Exchange Commission under File No. 333-289004. Form S-3 registrations are available to public companies that meet specified eligibility criteria and allow for streamlined, shorter-form disclosure requirements relative to Form S-1 registrations. The company filed a prospectus supplement dated July 28, 2026, which supplements an earlier prospectus dated July 28, 2025, and together these documents constitute the offering materials for shares sold under the distribution agreement.

The prospectus and prospectus supplement provide investors with material information about Dynex Capital's business, financial condition, risk factors, and use-of-proceeds disclosure as required by federal securities law. Prospectus supplements typically highlight any material changes, new risk factors, or updated financial information that have occurred since the base prospectus was filed. The timing of the prospectus supplement concurrent with Amendment No. 10 suggests that Dynex Capital sought to update market participants on any material developments before expanding share availability, though the disclosure does not elaborate on the specific content of the supplement beyond its existence and filing date.

Syndicate of Major Financial Institutions Acting as Sales Agents

Dynex Capital has designated ten major financial institutions to serve as sales agents under the distribution agreement. These agents are BTIG, LLC; Citizens JMP Securities, LLC; Goldman Sachs & Co. LLC; JonesTrading Institutional Services LLC; J.P. Morgan Securities LLC; Keefe, Bruyette & Woods, Inc.; Morgan Stanley & Co. LLC; RBC Capital Markets, LLC; UBS Securities LLC; and Wells Fargo Securities, LLC. This syndicate composition reflects a mix of global investment banks with substantial capital markets operations and specialized firms with deep expertise in mortgage REIT finance and institutional sales distribution.

The presence of multiple sales agents creates competitive pricing pressure and expands distribution reach across diverse investor classes and geographic markets. Each sales agent is compensated through customary fees and commissions on shares successfully sold through their efforts, creating aligned incentives for active distribution. The filing notes that the sales agents and their respective affiliates have provided investment banking, brokerage, and other services to Dynex Capital in the ordinary course of business and may continue to do so going forward. This disclosure acknowledges potential conflicts of interest, though such relationships are standard in the securities industry and typically managed through firewalls and disclosure protocols.

Historical Amendment Pattern and Ongoing Program Evolution

Amendment No. 10 represents the most recent in a series of nine prior amendments to the original distribution agreement dating back to June 29, 2018. The filing lists previous amendments executed on May 31, 2019; August 3, 2021; June 3, 2022; February 10, 2023; October 29, 2024; May 1, 2025; July 29, 2025; January 27, 2026; and April 28, 2026. This frequency of amendments—with multiple modifications occurring within 2026 alone—suggests that Dynex Capital has been actively utilizing its at-the-market capacity and has required successive expansions to maintain adequate available share authorization. The pattern of amendments spaced at intervals ranging from months to over a year indicates that the company's capital raising needs have been ongoing but variable in intensity.

The cumulative effect of these amendments demonstrates the company's reliance on the at-the-market offering mechanism as a primary equity financing tool. Rather than returning to shareholders for periodic authorization increases through proxy votes, which would interrupt trading and require formalized stockholder approval, the amendment structure allows for more nimble adjustments to available capacity as market conditions and capital needs evolve. The disclosure provides no guidance on when the company might seek to increase authorization again, nor does it specify anticipated uses of newly authorized shares, leaving such determinations to management's discretion based on future capital requirements and market opportunities.

Legal Opinions and Tax Compliance Documentation

In connection with the filing of Amendment No. 10, Dynex Capital obtained legal counsel from Morrison & Foerster LLP to render opinions on two key matters: the legality of the common stock being issued and certain United States federal income tax implications of the offering. The legal opinion on legality (filed as Exhibit 5.1) confirms that the shares authorized for issuance under the amendment have been duly authorized and, when issued and paid for in accordance with the terms of the distribution agreement, will be validly issued, fully paid, and non-assessable. This opinion is standard practice in securities offerings and provides underwriters and investors with assurance that the shares will have the legal status claimed in offering documents.

The tax opinion (filed as Exhibit 8.1) addresses certain U.S. federal income tax matters relevant to shareholders and the company. While the specific contents of the tax opinion are not detailed in the filing itself, such opinions typically address questions regarding the tax treatment of dividends paid by the REIT, the company's continued qualification as a mortgage REIT under Internal Revenue Code Section 856, and related tax consequences. As a REIT, Dynex Capital is subject to stringent tax requirements, and maintaining tax-qualified status is critical to its business model and shareholder value proposition. Tax opinions accompanying equity offerings provide stakeholders with documented counsel on compliance with applicable federal tax law.

At-the-Market Offering Mechanics and Market Flexibility

At-the-market offerings, also referred to as ATM programs, function distinctly from traditional underwritten public offerings in that sales occur in smaller, incremental tranches at or near prevailing market prices rather than as a single large block transaction. This mechanism allows issuers like Dynex Capital to access equity capital markets continuously without needing to time a specific offering date or announce a large single issuance that could create downward price pressure. Sales agents execute trades on behalf of the company through ordinary brokerage channels, and the company receives proceeds net of agent commissions. The at-the-market structure is particularly advantageous for REITs and other companies with predictable capital needs, as it aligns timing of issuance with stock price strength and investor demand.

For investors, ATM programs present both benefits and considerations. The continuous nature of potential share issuance means that dilution can occur steadily over time, though in smaller increments than large secondary offerings. Conversely, the company avoids the need to announce large offerings that might trigger temporary stock price declines associated with dilution expectations. ATM programs also provide management with flexibility to raise capital opportunistically during market strength rather than being forced to access equity markets during unfavorable windows. The disclosure does not provide information on Dynex Capital's historical utilization rates under the ATM program or expected timing of share issuance going forward.

Investment Considerations for Dynex Capital Shareholders and Prospective Investors

The expansion of share authorization under Amendment No. 10 carries implications for both current and prospective shareholders of Dynex Capital. An increase in authorized but unissued common stock creates the potential for future dilution, and the magnitude of remaining available shares—99.3 million—is substantial relative to typical trading volumes and total capitalization metrics for mortgage REITs. If Dynex Capital deploys this capacity at a measured pace aligned with genuine capital needs, dilution may be offset by accretive use of proceeds. However, rapid or aggressive utilization of the expanded authorization could exert downward pressure on per-share metrics such as earnings per share, book value per share, and dividend coverage ratios.

For dividend-focused REIT investors, the capital raising program is contextually important because it affects the company's ability to maintain and grow distributions. REITs are required to distribute at least 90 percent of taxable income to shareholders, and they rely on a combination of operational cash flow and selective capital raises to fund distributions, acquisitions, and portfolio adjustments. The expanded ATM capacity signals that management anticipates ongoing capital raising needs, whether to fund new acquisitions, rebalance its portfolio of mortgage-backed securities, or maintain distributions during periods of negative cash flow. The filing does not specify the intended use of proceeds from the expanded authorization, leaving investors to infer likely applications based on the company's historical investment activities and stated strategy.

Regulatory Status and Emerging Growth Company Classification

Dynex Capital disclosed in the filing that it is not an emerging growth company as defined under Rule 405 of the Securities Act of 1933 and Rule 12b-2 of the Securities Exchange Act of 1934. Emerging growth company status provides smaller public companies with scaled disclosure and compliance requirements, including the option to use extended transition periods for adopting new accounting standards. The fact that Dynex Capital does not qualify as an emerging growth company indicates that the company exceeds size thresholds established for that classification, either based on public float of equity or annual revenue metrics. This status means that Dynex Capital is subject to full standard disclosure and compliance obligations without accommodation for smaller company status.

The company's registration of common stock and Series C preferred stock on the New York Stock Exchange is consistent with larger, more mature REIT issuers that have achieved sufficient scale and market recognition to qualify for listing on a national securities exchange. NYSE listing rules impose governance, disclosure, and financial standards that reinforce investor protections and market integrity. Dynex Capital's continued compliance with these standards, as evidenced by the orderly filing of its amendment and associated counsel opinions, demonstrates ongoing adherence to regulatory obligations. The filing was signed on July 28, 2026, by Michael A. Angelo, Chief Legal Officer and Corporate Secretary, indicating proper corporate authorization and execution.