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Crystal River Reports Third Quarter 2009 Financial Results
By marketwire

NEW YORK, NEW YORK -- (Marketwire) -- 11/06/09 -- Crystal River Capital, Inc. ("Crystal River" or the "Company") (OTCBB: CYRV) today announced its results for the quarter ended September 30, 2009.

For additional information, please refer to Crystal River's letter to stockholders, which has been posted to the Investor Relations section of the Company's website at www.crystalriverreit.com.

I. THIRD QUARTER UPDATE

- Operating results: The net loss for the quarter ended September 30, 2009 totaled $55.3 million, or $2.19 per share, compared to a net loss of $56.7 million, or $2.28 per share, for the third quarter of 2008 and a net loss of $6.5 million, or $0.26 per share, for the second quarter of 2009. The increase in the net loss from the second quarter was primarily attributable to an increase in other-than-temporary impairments on available-for-sale securities and realized and unrealized loss on derivatives in the third quarter.

- Liquidity and leverage update: The amount drawn under the Company's revolving credit facility remained unchanged as of September 30, 2009 from June 30, 2009 at $28.9 million.

- Special Committee: In August, the Company announced the formation of a special committee comprised of its independent directors and that the special committee has retained a financial advisor and legal counsel to assist in a review of the Company's strategic alternatives. However, given market conditions and their impact on Crystal River's operations, the Board believes that it is appropriate to assess a wide array of possible alternatives. At present, no such decisions have been made and it is not yet possible to predict what will result from the process. The Company does not intend to disclose further developments until it has approved a course of action in connection with the exploration of its strategic alternatives.

Dividend Information

The Board of Directors has elected to suspend the quarterly dividend to holders of shares of the Company's common stock to preserve liquidity in consideration of the large increase in the delinquency rate on the Company's CMBS portfolio and the resulting uncertainty regarding operating cash flows. Based on the Company's current forecasts, Crystal River would not be required to make any further distributions in 2009 in order to maintain its REIT status through 2009. The elimination of the common dividends for the remainder of 2009, assuming the same $0.10 quarterly dividend per share that was paid in October 2009, equates to approximately $2.5 million in cash flow savings each quarter. The Board of Directors will continue to evaluate the Company's dividend policy in light of its portfolio performance and relevant provisions of the Internal Revenue Code.

About Crystal River

Crystal River Capital, Inc. (OTCBB: CYRV) is a specialty finance REIT. The Company invests in commercial real estate, real estate loans, and real estate-related securities, such as commercial and residential mortgage-backed securities. For more information, visit www.crystalriverreit.com.

II. CONSOLIDATED FINANCIAL STATEMENTS

Condensed Consolidated Balance Sheets (Unaudited) ---------------------------------------------------------------------------- (in thousands, except share September 30, June 30, December 31, and per share data) 2009 2009 2008 ---------------------------------------------------------------------------- ASSETS Investment securities, at fair value: Available-for-sale securities $ 14,219 $ 14,540 $ 21,615 Held-for-trading securities 49,609 42,713 51,301 Real estate loans 2,520 2,517 9,034 Real estate loans held for sale 5,058 5,058 5,058 Commercial real estate, net 223,380 225,006 228,259 Other investments 1,550 1,550 1,550 Intangible assets 71,316 72,724 75,541 Cash and cash equivalents 3,335 1,930 6,239 Restricted cash 16,926 17,501 26,107 Receivables 9,309 7,733 7,297 Rent enhancement receivable, related party 12,035 12,620 13,828 Prepaid expenses and other assets 1,186 1,965 939 Deferred financing costs, net 1,476 1,495 1,533 ------------ ---------- ---------- Total Assets $ 411,919 $ 407,352 $ 448,301 ------------ ---------- ---------- ------------ ---------- ---------- LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Liabilities Accounts payable and accrued expenses $ 3,697 $ 2,863 $ 2,652 Dividends payable 2,526 2,522 2,511 Intangible liabilities 68,155 69,525 72,265 Collateralized debt obligations 43,248 40,538 45,429 Junior subordinated notes 51,550 51,550 51,550 Mortgages payable 219,380 219,380 219,380 Secured revolving credit facility, related party 28,920 28,920 32,920 Interest payable 2,141 1,989 1,357 Derivative liabilities 40,996 31,184 57,646 ------------ ---------- ---------- Total Liabilities 460,613 448,471 485,710 ------------ ---------- ---------- Commitments and Contingencies Stockholders' Equity (Deficit) Preferred stock, par value $0.001 per share, 100,000,000 shares authorized, no shares issued and outstanding - - - Common stock, $0.001 par value, 500,000,000 shares authorized, 24,909,255; 24,909,254; and 24,905,252 shares issued and outstanding, respectively 25 25 25 Additional paid-in capital 564,762 564,690 564,560 Accumulated other comprehensive loss (14,097) (64,278) (9,815) Accumulated deficit (599,384) (541,556) (592,179) ------------ ---------- ---------- Total Stockholders' Equity (Deficit) (48,694) (41,119) (37,409) ------------ ---------- ---------- Total Liabilities and Stockholders' Equity (Deficit) $ 411,919 $ 407,352 $ 448,301 ------------ ---------- ---------- ------------ ---------- ---------- Condensed Consolidated Statements of Operations (Unaudited) ---------------------------------------------------------------------------- (in thousands, Three months ended Nine months ended except share and Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30, per share data) 2009 2009 2008 2009 2008 ---------------------------------------------------------------------------- Revenues Interest income - investment securities $ 6,314 $ 7,096 $ 21,069 $ 27,298 $ 85,361 Interest income - real estate loans 229 228 936 915 5,755 Other interest and dividend income 37 41 185 97 1,072 ---------- ---------- ---------- ---------- ----------- Total interest and dividend income 6,580 7,365 22,190 28,310 92,188 Rental income, net 5,284 5,446 5,399 16,334 16,611 ---------- ---------- ---------- ---------- ----------- Total revenues 11,864 12,811 27,589 44,644 108,799 ---------- ---------- ---------- ---------- ----------- Expenses Interest expense 5,919 6,195 9,302 18,647 44,302 Management fees, related party - - 243 - 1,328 Professional fees 1,006 361 480 1,811 1,733 Depreciation and amortization 3,022 3,022 3,022 9,066 9,066 Insurance expense 488 483 480 1,395 1,290 Directors' fees 209 86 86 380 366 Public company expense 92 167 105 370 518 Commercial real estate expenses 428 382 348 1,203 1,185 Provision for loss on real estate loans - - 4,401 6,758 20,850 Other expenses 85 82 237 249 1,158 ---------- ---------- ---------- ---------- ----------- Total expenses 11,249 10,778 18,704 39,879 81,796 ---------- ---------- ---------- ---------- ----------- Other Revenues (Expenses) Realized net gain (loss) on sale of investment securities, real estate loans and other investments 21 69 97 130 (4,951) Realized and unrealized gain (loss) on derivatives (13,078) 6,496 (6,152) (2,711) (44,183) Total other- than-temporary impairments on available- for-sale securities (56,374) (37,328) (26,876) (99,486) (112,340) Portion of other-than- temporary impairments recognized in OCI 9,658 22,979 - 32,637 - Net change in assets and liabilities valued under fair value option 5,955 969 (32,305) (2,952) (134,508) Loss from equity investments - - - - (40) Other (2,093) (1,708) (397) (4,150) (950) ---------- ---------- ---------- ---------- ----------- Total other expenses (55,911) (8,523) (65,633) (76,532) (296,972) ---------- ---------- ---------- ---------- ----------- Net Loss $ (55,296) $ (6,490) $ (56,748) $ (71,767) $ (269,969) ---------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ---------- ----------- Net loss per share - basic and diluted $ (2.19) $ (0.26) $ (2.28) $ (2.85) $ (10.88) ---------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ---------- ----------- Weighted average shares of common stock outstanding:(1) Basic and diluted 25,230,669 25,189,825 24,882,612 25,184,316 24,813,649 ---------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ---------- ----------- Dividends declared per share of common stock $ 0.10 $ 0.10 $ 0.10 $ 0.30 $ 1.08 ---------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ---------- ----------- ---------------------------------------------------------------------------- (1) Including other participating securities. Comprehensive Loss (Unaudited) ---------------------------------------------------------------------------- Three months ended Nine months ended Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30, (in thousands) 2009 2009 2008 2009 2008 ---------------------------------------------------------------------------- Net Loss $ (55,296) $ (6,490) $ (56,748) $ (71,767) $ (269,969) Cumulative effect of the adoption of new accounting principle - (72,126) - (72,126) - Changes in OCI - securities available for sale 49,881 16,699 (1,033) 66,775 (7,232) Realization of deferred unrealized losses on cash flow hedges - - - - 13,181 Amortization of net realized losses on cash flow hedges into interest expense 301 301 586 1,069 1,031 ---------------------------------------------------------------------------- Comprehensive Loss $ (5,114) $ (61,616) $ (57,195) $ (76,049) $ (262,989) ---------------------------------------------------------------------------- SUPPLEMENTAL INFORMATION Total Investment Portfolio at September 30, 2009 The following table summarizes the Company's investment portfolio at September 30, 2009, June 30, 2009, and September 30, 2008: ---------------------------------------------------------------------------- September 30, 2009 June 30, 2009 September 30, 2008 ($ in Carrying Carrying Carrying millions) Value % Total Value % Total Value % Total ---------------------------------------------------------------------------- Investment securities CMBS $ 58.5 19.7% $ 50.3 17.3% $ 158.7 34.9% Prime RMBS 3.7 1.3% 4.8 1.6% 22.7 5.0% Subprime RMBS 1.6 0.5% 2.2 0.8% 10.0 2.2% Preferred stock - - - - - - Direct real estate loans Construction loans - - - - 2.7 0.6% Mezzanine loans 5.1(1) 1.7% 5.1(1) 1.7% 26.2(1) 5.8% Whole loans 2.5 0.9% 2.5 0.9% 2.5 0.6% Commercial real estate- owned(2) 223.4 75.4% 225.0 77.2% 229.9 50.6% Other 1.6 0.5% 1.6 0.5% 1.6 0.3% ---------------------------------------------------------------------------- Total $ 296.4 100.0% $ 291.5 100.0% $ 454.3 100.0% ---------------------------------------------------------------------------- (1) Includes one loan in the amount of $5.1 million and $20.4 million held for sale for the quarter ended September 30 and June 30, 2009 and September 30, 2008 respectively. (2) Excludes intangible assets. Third Quarter 2009 Securities Roll-Forward Table The table below details the impact of purchases and sales, principal paydowns, premium and discount amortization, and market value adjustments on our investment securities during the third quarter of 2009: ---------------------------------------------------------------------------- (in millions) CMBS Prime RMBS Subprime RMBS Total Portfolio ---------------------------------------------------------------------------- Carrying Value June 30, 2009 $ 50.3 $ 4.8 $ 2.2 $ 57.3 Principal paydowns - (0.3) (0.1) (0.4) Principal loss (0.1) (1.3) (0.6) (2.0) Amortization (3.9) (1.1) (0.1) (5.1) Market value adjustments: CDO assets 10.2 0.6 0.1 10.9 Non-CDO assets (45.2) (0.5) (1.0) (46.7) OCI 47.2 1.5 1.1 49.8 ---------------------------------------------------------------------------- Carrying Value September 30, 2009 $ 58.5 $ 3.7 $ 1.6 $ 63.8 ----------------------------------------------------------------------------

COMMERCIAL REAL ESTATE ("CRE") INVESTMENT PORTFOLIO

At September 30, 2009, Crystal River's CRE investment portfolio totaled $226.5 million. The CRE portfolio consists of three high-quality office buildings 100% leased on a triple-net basis to JPMorgan Chase. The buildings are financed with long-term fixed-rate mortgage loans.

CRE investment portfolio at September 30, 2009:

---------------------------------------------------------------------------- Year of Total Book Mortgage Net Book Lease Area Value(1) Debt Equity Location Tenant Expiry (000s Sq. Ft.) (Millions) (Millions)(Millions) ---------------------------------------------------------------------------- Houston, JPMorgan Texas Chase 2021 428.6 $ 58.9 $ 53.4 $ 5.5 Arlington, JPMorgan Texas Chase 2027 171.5 21.0 20.9 0.1 Phoenix, JPMorgan Arizona Chase 2021 724.0 146.6 145.1 1.5 ---------------------------------------------------------------------------- Total CRE 1,324.1 $ 226.5 $ 219.4 $ 7.1 ---------------------------------------------------------------------------- (1) Book value includes intangible assets and intangible liabilities, but excludes rent-enhancement and straight-line rent receivables.

REAL ESTATE LOAN INVESTMENT PORTFOLIO

At September 30, 2009, Crystal River's real estate loan portfolio, which consists of two mezzanine loans (one of which is held for sale), a construction loan and a whole loan, totaled $7.6 million and had a weighted average interest rate of 9.3%.

Real estate loan portfolio at September 30, 2009:

---------------------------------------------------------------------------- Construction ($ in Mezzanine Loans Loans Whole Loans Total / WA(1) millions) Fixed Floating Fixed Floating Fixed Floating Fixed Floating ---------------------------------------------------------------------------- Outstanding Face Amount $ 17.4 $ - $ 14.6 $ - $ - $ 2.5 $ 32.0 $ 2.5 Carrying Value 5.1 - - - - 2.5 5.1 2.5 Amortized Cost 17.4 - 14.6 - - 2.5 32.0 2.5 Number of Loans 2 - 1 - - 1 3 1 Number of loans that are delinquent 1 - 1 - - - 2 - WA Fixed Rate 10.1% - 16.0%(3) - - n/a 10.1%(4) n/a WA Floating Rate: Spread over LIBOR(2) n/a - n/a - - 3.3% n/a 3.3% ---------------------------------------------------------------------------- (1) Weighted Average ("WA"). (2) London Interbank Offered Rate ("LIBOR"). (3) Construction loan has been placed on non-accrual status. (4) Excludes 16.0% WA fixed rate for construction loan. CMBS INVESTMENT PORTFOLIO CMBS portfolio by credit rating at September 30, 2009: ---------------------------------------------------------------------------- Weighted Average -------------------------- ($ in millions) Amortized Cost Carrying Value Yield(1) Term (Yrs)(2) ---------------------------------------------------------------------------- BBB $ 32.1 $ 8.6 37.7% 6.8 BB 7.4 3.8 22.4% 5.4 B 19.3 16.1 (17.6)% 3.1 Below B 18.6 30.0 (19.1)% 1.4 ---------------------------------------------------------------------------- Total CMBS $ 77.4 $ 58.5 (7.6)% 2.9 ---------------------------------------------------------------------------- (1) Yield is the implied loss-adjusted yield based on our expectation of future cash flows and the fair value of the security. (2) Refers to the loss-adjusted weighted average remaining life. Credit Characteristics of CMBS portfolio by vintage at September 30, 2009: CDO Assets: ---------------------------------------------------------------------------- Orig- Outstan- Delin- Cumul- inal ding Carry- Principal quency ative WA Face Face ing Subord- 60+/FC Loss to Vintage Rating(1) Amount Amount Value ination /REO(2) Date(3) ---------------------------------------------------------------------------- Pre-2005 B- $ 2.8 $ 2.8 $ 0.7 3.66% 1.72% 0.00% 2005 CCC+ 244.8 244.8 23.0 2.63% 4.29% 0.00% 2006 CCC 248.3 248.0 20.0 2.28% 3.87% 0.15% 2007 CCC+ 27.9 27.9 2.6 2.68% 3.38% 0.00% ---------------------------------------------------------------------------- Total CMBS CCC+ $ 523.8 $ 523.5 $ 46.3 2.47% 4.03% 0.07% ---------------------------------------------------------------------------- (1) Rounded to nearest rating. (2) "60+" means that a payment on an underlying collateral loan is more than 60 days past due; "FC" means that the collateral underlying the loan is under foreclosure; "REO" means that the collateral underlying the loan has been foreclosed and is owned by the issuing trust. Delinquency rates refer to the entire securitization. (3) Actual losses against securities in Crystal River's portfolio, based on original face amount. Non-CDO Assets: ---------------------------------------------------------------------------- Orig- Outstan- Delin- Cumul- inal ding Carry- Principal quency ative WA Face Face ing Subord- 60+/FC Loss to Vintage Rating Amount Amount Value ination /REO Date ---------------------------------------------------------------------------- 2005 NR $ 50.8 $ 43.3 $ 2.4 0.21% 3.56% 14.82% 2006 CC 119.6 117.8 4.8 0.61% 3.78% 1.47% 2007 CC 132.8 132.8 5.0 1.17% 2.75% 0.00% ---------------------------------------------------------------------------- Total CMBS CC $ 303.2 $ 293.9 $ 12.2 0.79% 3.28% 3.06% ---------------------------------------------------------------------------- PRIME RMBS INVESTMENT PORTFOLIO Prime RMBS portfolio by credit rating at September 30, 2009: ---------------------------------------------------------------------------- Weighted Average -------------------------- ($ in millions) Amortized Cost Carrying Value Yield Term (Yrs) ---------------------------------------------------------------------------- BB and above $ - $ - -% - B 0.6 0.1 61.8% 8.5 Below B 14.6 3.6 287.5% 4.0 ---------------------------------------------------------------------------- Total Prime RMBS $ 15.2 $ 3.7 280.0% 4.1 ---------------------------------------------------------------------------- Credit Characteristics of Prime RMBS portfolio by vintage at September 30, 2009: CDO Assets: ---------------------------------------------------------------------------- Orig- Outstan- Delin- Cumul- inal ding Carry- Principal quency ative WA Face Face ing Subord- 60+/FC Loss to Vintage Rating Amount Amount Value ination /REO Date ---------------------------------------------------------------------------- 2003 CCC $ 1.9 $ 1.7 $ 0.2 0.23% 0.65% 0.00% 2004 CCC- 18.8 10.6 0.3 0.58% 18.40% 5.88% 2005 CCC- 79.5 54.7 1.8 0.75% 16.82% 9.61% ---------------------------------------------------------------------------- Total Prime RMBS CCC- $ 100.2 $ 67.0 $ 2.3 0.71% 16.66% 8.99% ---------------------------------------------------------------------------- Non-CDO Assets: ---------------------------------------------------------------------------- Orig- Outstan- Delin- Cumul- inal ding Carry- Principal quency ative WA Face Face ing Subord- 60+/FC Loss to Vintage Rating Amount Amount Value ination /REO Date ---------------------------------------------------------------------------- 2003 NR $ 1.9 $ 1.4 $ 0.1 0.00% 0.67% 12.35% 2004 NR 0.4 0.3 0.0 0.00% 3.78% 8.73% 2005 C 56.0 35.3 1.2 0.43% 9.23% 11.36% 2006 C 4.0 3.8 0.1 0.64% 4.61% 0.00% 2007 C- 5.9 4.4 0.0 0.00% 6.72% 23.90% ---------------------------------------------------------------------------- Total Prime RMBS C- $ 68.2 $ 45.2 $ 1.4 0.39% 8.29% 10.53% ---------------------------------------------------------------------------- SUBPRIME RMBS INVESTMENT PORTFOLIO Subprime RMBS portfolio by credit rating at September 30, 2009: ---------------------------------------------------------------------------- Weighted Average -------------------------- ($ in millions) Amortized Cost Carrying Value Yield Term (Yrs) ---------------------------------------------------------------------------- BBB $ 2.3 $ 0.7 75.8% 4.8 BB - - -% - B 1.4 0.1 115.6% 18.0 Below B 3.1 0.8 436.3% 5.2 ---------------------------------------------------------------------------- Total Subprime RMBS $ 6.8 $ 1.6 263.8% 5.7 ---------------------------------------------------------------------------- Credit Characteristics of Subprime RMBS portfolio by vintage at September 30, 2009: CDO Assets: ---------------------------------------------------------------------------- Orig- Outstan- Delin- Cumul- inal ding Carry- Principal quency ative WA Face Face ing Subord- 60+/FC Loss to Vintage Rating Amount Amount Value ination /REO Date ---------------------------------------------------------------------------- 2005 DDD+ $ 50.1 $ 37.7 $ 0.7 3.16% 34.43% 1.21% ---------------------------------------------------------------------------- Total Subprime RMBS DDD+ $ 50.1 $ 37.7 $ 0.7 3.16% 34.43% 1.21% ---------------------------------------------------------------------------- Non-CDO Assets: ---------------------------------------------------------------------------- Orig- Outstan- Delin- Cumul- inal ding Carry- Principal quency ative WA Face Face ing Subord- 60+/FC Loss to Vintage Rating Amount Amount Value ination /REO Date ---------------------------------------------------------------------------- 2005 BBB- $ 6.6 $ 5.4 $ 0.3 0.86% 27.76% 63.30% 2006 BB- 9.2 8.3 0.5 3.91% 23.19% 0.00% 2007 C 1.1 1.1 0.1 0.51% 37.61% 0.00% ---------------------------------------------------------------------------- Total Sub-prime RMBS BB $ 16.9 $ 14.8 $ 0.9 2.54% 25.96% 40.42% ----------------------------------------------------------------------------

Financing Details

The following table shows the Company's investment securities, real estate loans, other investments and other assets as of September 30, 2009 and the different lines used to finance such assets, categorized by (i) CDO debt, (ii) other term debt, such as mortgage loans on commercial real estate and trust preferred securities and (iii) the Company's secured revolving credit facility:

---------------------------------------------------------------------------- Assets Debt ---------------------------------------------------------------------------- CDO Other Term Funding ($ in millions) Carrying Value Debt(1) Debt Facility ---------------------------------------------------------------------------- CMBS $ 58.5 $ 40.4 $ - $ 3.2 Prime RMBS 3.7 2.1 - - Subprime RMBS 1.6 0.7 - - Real estate loans 7.6 - - 6.1 Commercial real estate 223.4 - 219.4 19.6 Trust Preferred Securities 1.6 - 51.6 - Other 115.5 - - - ---------------------------------------------------------------------------- Total $ 411.9 $ 43.2 $ 271.0 $ 28.9 ---------------------------------------------------------------------------- (1) CDO debt has been allocated based upon the asset mix within the Company's CDOs.

CDO and Non-CDO Assets

The table below summarizes the breakdown of our investment securities between assets held by non-recourse securitization subsidiaries financed by CDO debt and assets held directly at September 30, 2009:

---------------------------------------------------------------------------- Consolidated ($ in millions) Carrying Value CDO Assets Non-CDO Assets ---------------------------------------------------------------------------- CMBS $ 58.5 $ 46.3 $ 12.2 Prime RMBS 3.7 2.3 1.4 Subprime RMBS 1.6 0.7 0.9 ---------------------------------------------------------------------------- Total $ 63.8 $ 49.3 $ 14.5 ----------------------------------------------------------------------------

Our securitized assets are held by two non-recourse securitization subsidiaries financed by CDO debt. The table below details the assets and liabilities of these securitizations at September 30, 2009:

---------------------------------------------------------------------------- Consolidated Consolidated Outstanding Carrying ($ in millions) Face Amount Value CDO I CDO II ---------------------------------------------------------------------------- CMBS $ 817.4 $ 46.3 $ 8.2 $ 38.1 Prime RMBS 112.2 2.3 2.3 - Subprime RMBS 52.5 0.7 0.7 - Receivables, cash and other assets - 4.4 1.8 2.6 Collateralized debt obligations (457.5) (43.2) (10.6) (32.6) Derivative and other liabilities, net - (31.1) (3.8) (27.3) ---------------------------------------------------------------------------- Net Equity $ 524.6 $ (20.6) $ (1.4) $ (19.2) ----------------------------------------------------------------------------

OTHER INFORMATION

The Company will file a Form 10-Q for the quarter ended September 30, 2009 with the Securities and Exchange Commission. Please read the Form 10-Q carefully as it will contain Crystal River's consolidated financial statements and notes thereto and Management's Discussion and Analysis of Financial Condition and Results of Operations. The Form 10-Q also will be made available under the Investor Relations section of Crystal River's website at www.crystalriverreit.com.

Forward-Looking Information

This news release, and our public documents to which we refer, contain or incorporate by reference certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements relating to our future financial results and future dividend payments. Forward-looking statements that are based on various assumptions (some of which are beyond our control) may be identified by reference to a future period or periods or by the use of forward-looking terminology, such as "may," "will," "believe," "expect," "anticipate," "continue," "should," "intend," or similar terms or variations on those terms or the negative of those terms. Although we believe that the expectations contained in any forward-looking statement are based on reasonable assumptions, we can give no assurance that our expectations will be attained. Factors that could cause actual results to differ materially from those set forth in the forward-looking statements include, but are not limited to, economic conditions generally and in the real estate market specifically, including further deterioration of the current global economic downturn and the extent of its effect on our industry, general volatility of the capital markets and the market price of shares of our common stock, our liquidity and refinancing demands, continued credit performance of our investments, changes in interest rates, changes in the yield curve,

changes in prepayment rates, the effectiveness of our hedging strategies, the availability of targeted investments for purchase and origination, the availability and cost of capital for financing future investments and, if available, the terms of any such financing, changes in the market value of our assets, future margin reductions and the availability of liquid assets to post additional collateral, the recovery of financing markets and our ability to obtain or refinance debt, changes in business conditions and the general economy, changes in the delinquency rates for the loans underlying our securitized debt assets, what, if anything, results from the Special Committee's review of strategic alternatives, competition within the specialty finance sector, changes in government regulations affecting our business, our ability to maintain our qualification as a real estate investment trust for federal income tax purposes, changes in generally accepted accounting principles and other risks disclosed from time to time in our filings with the Securities and Exchange Commission. For more information on the risks facing the Company, see the risk factors in Exhibit 99.1 to our Form 10-Q for the period ended June 30, 2009, which we filed with the SEC on August 10, 2009, and the risk factors in Exhibit 99.1 to our Form 10-Q for the period ended September 30, 2009, which we expect to file with the SEC by November 9, 2009. We do not undertake, and specifically disclaim any obligation, to publicly release any update or supplement to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.

Contacts:
Crystal River Capital, Inc.
Jody Sheu
(212) 549-8346
jsheu@crystalriverreit.com
(CRZ-F)

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