SUBSEQUENT EVENTS	12 Months Ended
Dec. 31, 2012
SUBSEQUENT EVENTS	17. SUBSEQUENT EVENTS On January 30, 2013, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), among the Company, CXS Acquisition Corporation, a Maryland corporation and a wholly-owned subsidiary of the Company (“Acquisition”), and CreXus Investment Corp., a Maryland corporation (“CreXus”), pursuant to which, among other things, Acquisition will commence a tender offer (the “Offer”) to purchase all of the outstanding shares of CreXus’ common stock, par value $0.01 per share (the “Shares”), that neither the Company nor Acquisition own at a price per share of $13.00 in cash, plus a cash payment to reflect a pro-rated quarterly dividend for the quarter in which the tender offer is closed, subject to the terms and conditions set forth in the Merger Agreement. If at least 51% of the Shares not owned by the Company or any of its subsidiaries, officers or directors are tendered and purchased by Acquisition in the tender offer, and subject to the satisfaction or waiver of certain limited conditions set forth in the Merger Agreement (including, if required, receipt of approval by CreXus’ stockholders), Acquisition will merge with and into CreXus, with CreXus surviving as a wholly-owned subsidiary of the Company (the “Merger”). In the Merger, each outstanding Share, other than Shares owned by Acquisition and the Company, will be converted into the right to receive the same cash consideration paid in the Offer. Under the terms of the Merger Agreement, CreXus may solicit, receive, evaluate and enter into negotiations with respect to alternative proposals from third parties for a period of 45 calendar days continuing through March 16, 2013 (the “Transaction Solicitation Period”). CreXus may continue discussions after the Transaction Solicitation Period with parties who made acquisition proposals during the Transaction Solicitation Period, or who made unsolicited acquisition proposals after the Transaction Solicitation Period, in either case that CreXus determines, in good faith, would result in, or is reasonably likely to result in, a superior proposal. If CreXus receives a superior proposal, the Company and Acquisition have the right to increase its offer price one time to a price that is at least $0.10 per share greater than the value per share stockholders would receive as a result of the superior proposal and thereafter CreXus may terminate after providing two business days’ notice. If CreXus terminates the Merger Agreement during the Transaction Solicitation Period or during the 10-day period following its expiration to enter into a superior proposal with a party who delivered a written acquisition proposal during the Transaction Solicitation Period, CreXus will be required to pay to the Company a termination fee of $15 million. If CreXus terminates the Merger Agreement thereafter in connection with a superior proposal, the termination fee will be $25 million. If the Merger Agreement is terminated in either circumstance, CreXus will also be required to reimburse the Company’s documented out-of-pocket expenses, up to $5 million. In all cases, the termination fee and expense reimbursement will be credited against the termination fee payable by CreXus under its management agreement with Fixed Income Discount Advisory Company (the “Manager”), which is a wholly owned subsidiary of the Company. The Merger Agreement includes customary representations, warranties and covenants of CreXus, the Company and Acquisition. CreXus has agreed to operate its business in the ordinary course consistent with past practice until the effective time of the Merger. The Company has separately agreed to not purchase any Shares in excess of the approximately 12.4% of the outstanding that it currently owns. Consummation of the Offer is subject to various conditions, including (1) the valid tender of the number of Shares that would represent at least 51% of the Shares not owned by the Company or any of its subsidiaries, officers or directors, (2) the consummation of the Offer or the Merger not being unlawful under any applicable statute, rule or regulation, (3) the consummation of the Offer or the Merger not being enjoined by order of any court or other governmental authority, (4) the absence of a Company Material Adverse Effect (as defined in the Merger Agreement), (5) neither CreXus’ board of directors nor its special committee of independent directors having withdrawn its recommendation of the Offer or Merger to CreXus’ stockholders, and (6) the satisfaction of certain other customary closing conditions. Neither the Offer nor the Merger is subject to a financing condition. The Company plans to finance the transaction with cash on hand. If, after completion of the Offer, the Company and Acquisition hold at least 90% of the outstanding Shares, the Merger will be consummated in accordance with the short-form merger provisions under Maryland law without the approval of the Merger by CreXus’ stockholders. If, after completion of the Offer, the Company and Acquisition hold less than 90% of the outstanding Shares, Acquisition will have the right to exercise an irrevocable option (the “Percentage Increase Option”) granted to it by CreXus under the Merger Agreement to purchase from CreXus that number of additional Shares that will increase the percentage of outstanding Shares owned by the Company and its subsidiaries to one share more than 90% of the outstanding Shares (after giving effect to the issuance of shares pursuant to the Percentage Increase Option). Upon exercise of the Percentage Increase Option, the Merger will be consummated in accordance with the short-form merger provisions under Maryland law without approval of the Merger by CreXus’ stockholders. CreXus’ board of directors, upon the unanimous recommendation and approval of a special committee consisting of three independent directors (the “Special Committee”), adopted resolutions (i) determining and declaring advisable the Merger Agreement and the Offer, the Merger, the Percentage Increase Option and the other transactions contemplated by the Merger Agreement, (ii) determining that the terms of the Offer, the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement are in the best interests of, and fair to, CreXus’ stockholders other than the Company and its affiliates, and (iii) recommending that CreXus’ stockholders (other than the Company and its affiliates) accept the Offer, tender their Shares into the Offer and, to the extent required by applicable law to consummate the Merger, vote their Shares in favor of approving the Merger.

17. SUBSEQUENT EVENTS

On January 30, 2013, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), among the Company, CXS Acquisition Corporation, a Maryland corporation and a wholly-owned subsidiary of the Company (“Acquisition”), and CreXus Investment Corp., a Maryland corporation (“CreXus”), pursuant to which, among other things, Acquisition will commence a tender offer (the “Offer”) to purchase all of the outstanding shares of CreXus’ common stock, par value $0.01 per share (the “Shares”), that neither the Company nor Acquisition own at a price per share of $13.00 in cash, plus a cash payment to reflect a pro-rated quarterly dividend for the quarter in which the tender offer is closed, subject to the terms and conditions set forth in the Merger Agreement. If at least 51% of the Shares not owned by the Company or any of its subsidiaries, officers or directors are tendered and purchased by Acquisition in the tender offer, and subject to the satisfaction or waiver of certain limited conditions set forth in the Merger Agreement (including, if required, receipt of approval by CreXus’ stockholders), Acquisition will merge with and into CreXus, with CreXus surviving as a wholly-owned subsidiary of the Company (the “Merger”). In the Merger, each outstanding Share, other than Shares owned by Acquisition and the Company, will be converted into the right to receive the same cash consideration paid in the Offer.

Under the terms of the Merger Agreement, CreXus may solicit, receive, evaluate and enter into negotiations with respect to alternative proposals from third parties for a period of 45 calendar days continuing through March 16, 2013 (the “Transaction Solicitation Period”). CreXus may continue discussions after the Transaction Solicitation Period with parties who made acquisition proposals during the Transaction Solicitation Period, or who made unsolicited acquisition proposals after the Transaction Solicitation Period, in either case that CreXus determines, in good faith, would result in, or is reasonably likely to result in, a superior proposal. If CreXus receives a superior proposal, the Company and Acquisition have the right to increase its offer price one time to a price that is at least $0.10 per share greater than the value per share stockholders would receive as a result of the superior proposal and thereafter CreXus may terminate after providing two business days’ notice. If CreXus terminates the Merger Agreement during the Transaction Solicitation Period or during the 10-day period following its expiration to enter into a superior proposal with a party who delivered a written acquisition proposal during the Transaction Solicitation Period, CreXus will be required to pay to the Company a termination fee of $15 million. If CreXus terminates the Merger Agreement thereafter in connection with a superior proposal, the termination fee will be $25 million. If the Merger Agreement is terminated in either circumstance, CreXus will also be required to reimburse the Company’s documented out-of-pocket expenses, up to $5 million. In all cases, the termination fee and expense reimbursement will be credited against the termination fee payable by CreXus under its management agreement with Fixed Income Discount Advisory Company (the “Manager”), which is a wholly owned subsidiary of the Company.

The Merger Agreement includes customary representations, warranties and covenants of CreXus, the Company and Acquisition. CreXus has agreed to operate its business in the ordinary course consistent with past practice until the effective time of the Merger. The Company has separately agreed to not purchase any Shares in excess of the approximately 12.4% of the outstanding that it currently owns.

Consummation of the Offer is subject to various conditions, including (1) the valid tender of the number of Shares that would represent at least 51% of the Shares not owned by the Company or any of its subsidiaries, officers or directors, (2) the consummation of the Offer or the Merger not being unlawful under any applicable statute, rule or regulation, (3) the consummation of the Offer or the Merger not being enjoined by order of any court or other governmental authority, (4) the absence of a Company Material Adverse Effect (as defined in the Merger Agreement), (5) neither CreXus’ board of directors nor its special committee of independent directors having withdrawn its recommendation of the Offer or Merger to CreXus’ stockholders, and (6) the satisfaction of certain other customary closing conditions. Neither the Offer nor the Merger is subject to a financing condition. The Company plans to finance the transaction with cash on hand.

If, after completion of the Offer, the Company and Acquisition hold at least 90% of the outstanding Shares, the Merger will be consummated in accordance with the short-form merger provisions under Maryland law without the approval of the Merger by CreXus’ stockholders. If, after completion of the Offer, the Company and Acquisition hold less than 90% of the outstanding Shares, Acquisition will have the right to exercise an irrevocable option (the “Percentage Increase Option”) granted to it by CreXus under the Merger Agreement to purchase from CreXus that number of additional Shares that will increase the percentage of outstanding Shares owned by the Company and its subsidiaries to one share more than 90% of the outstanding Shares (after giving effect to the issuance of shares pursuant to the Percentage Increase Option). Upon exercise of the Percentage Increase Option, the Merger will be consummated in accordance with the short-form merger provisions under Maryland law without approval of the Merger by CreXus’ stockholders.

CreXus’ board of directors, upon the unanimous recommendation and approval of a special committee consisting of three independent directors (the “Special Committee”), adopted resolutions (i) determining and declaring advisable the Merger Agreement and the Offer, the Merger, the Percentage Increase Option and the other transactions contemplated by the Merger Agreement, (ii) determining that the terms of the Offer, the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement are in the best interests of, and fair to, CreXus’ stockholders other than the Company and its affiliates, and (iii) recommending that CreXus’ stockholders (other than the Company and its affiliates) accept the Offer, tender their Shares into the Offer and, to the extent required by applicable law to consummate the Merger, vote their Shares in favor of approving the Merger.