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EXHIBIT 8.1
[ANDREWS & KURTH L.L.P. LETTERHEAD]
August 27, 2001
Capstead Mortgage Corporation
8401 N. Central Expressway
Suite 800
Dallas, Texas 75225
Re: Capstead Mortgage Corporation
Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as counsel to Capstead Mortgage Corporation ("Capstead")
in connection with the preparation of a Prospectus included in a registration
statement on Form S-3, which has been filed with the Securities and Exchange
Commission with respect to the sale by Capstead of common stock and preferred
stock as described in such registration statement. You have requested our
opinion regarding Capstead's qualification as a real estate investment trust
("REIT") pursuant to sections 856 through 860 of the Internal Revenue Code of
1986, as amended (the "Code"), as set forth below. Capstead has and has had a
number of wholly-owned subsidiaries, the income, liabilities, and assets of
which are not and were not accounted for separately from Capstead for federal
income tax purposes pursuant to applicable provisions of the Code. This letter
refers to Capstead, as aggregated with such subsidiaries as were in existence
during the period for which reference is made, as "Capstead REIT." In addition,
Capstead owned all of the outstanding common stock of Capstead Securities
Corporation I ("OLD CSCI") from March 13, 1986 until December 30, 1993, the date
of its merger with and into CMC Liquidation Corporation (which corporation
changed its name to Capstead Securities Corporation I ("New CSCI")).
For the purpose of rendering our opinion, we have examined and are
relying upon the truth and accuracy, at all relevant times, of the statements,
covenants, representations and warranties contained in the following documents:
1. The Articles of Incorporation of Capstead and the Certificate of
Incorporation of (i) OLD CSCI, (ii) CMF Mortgage Funding Corporation, (iii)
Capstead Holdings, Inc., (iv) Capstead Inc. and (v) each wholly owned subsidiary
of Capstead, each as amended and supplemented to the date hereof.
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Capstead Mortgage Corporation
August 27, 2001
Page 2
2. The By-Laws of Capstead and the Bylaws of OLD CSCI.
3. Capstead REIT's federal income tax returns for taxable years 1985,
1986, 1987, 1988, 1989, 1990, 1991, 1992, 1993, 1994, 1995, 1996, 1997, 1998 and
1999.
4. OLD CSCI's federal income tax returns for taxable years 1986, 1987,
1988, 1989, 1990, 1991, 1992 and 1993.
5. The registration statement with which this letter is being filed.
6. Representations made to us by an officer of Capstead in a
certificate as of the date hereof and representations made to us by an officer
of New CSCI in a certificate as of the date hereof.
In connection with rendering this opinion, we have assumed and are
relying upon, without any independent investigation or review thereof, the
following:
1. The authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us as copies, and
authenticity of the originals of such documents.
2. The genuineness of all signatures, the due authorization, execution
and delivery of all documents by all parties thereto and the due authority of
all persons executing such documents.
3. None of Capstead, its wholly owned subsidiaries, or Capstead
Holdings, Inc. will make any amendments to its organizational documents after
the date of this opinion that would adversely affect Capstead REIT's
qualification as a REIT for any taxable year.
4. No actions will be taken by Capstead REIT after the date hereof that
would have the effect of altering the facts upon which the opinion set forth
below is based.
Based on the foregoing and subject to the assumptions, exceptions,
limitations and qualifications set forth herein, we are of the opinion that:
(i) For all of its taxable years beginning September 5, 1985 and
ending December 31, 2000, Capstead REIT has met the
requirements for qualification as a REIT under the Code and
will be able to qualify as a REIT for taxable years beginning
on and after January 1, 2001, provided that Capstead REIT
continues to be organized and operated after the date of this
letter so as to satisfy the applicable REIT requirements under
the Code, and
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Capstead Mortgage Corporation
August 27, 2001
Page 3
(ii) The statements in the Prospectus set forth under the caption
"Taxation" accurately describes the material federal income
tax consequences to the holders of Capstead's common stock
under existing law and subject to the qualifications and
assumptions stated therein.
In addition to the assumptions set forth above, this opinion is subject
to the following exceptions, limitations and qualifications:
1. Our opinion expressed herein is based upon our interpretation of the
current provisions of the Code and existing judicial decisions, administrative
regulations and published rulings and procedures. Our opinion is not binding
upon the Internal Revenue Service or courts and there is no assurance that the
Internal Revenue Service will not successfully challenge the conclusion set
forth herein. The Internal Revenue Service has not yet issued regulations or
administrative interpretations with respect to various provisions of the Code
relating to REIT qualification. No assurance can be given that future
legislative, judicial or administrative changes, on either a prospective or
retroactive basis, would not adversely affect the accuracy of the conclusion
stated herein.
2. Our opinion is limited to the federal income tax matters addressed
herein, and no other opinions are rendered with respect to any other matter not
specifically set forth in the foregoing opinion.
3. Our opinion is limited in all respects to the federal law of the
United States, and we assume no responsibility as to the applicability thereto,
or the effect thereon, of the laws of any other jurisdiction.
4. Except as described in this letter, we have made no efforts to
verify the accuracy and genuineness of the documents, assumptions and
representations set forth above.
In the event any one of the statements, representations, warranties or
assumptions we have relied upon to issue this opinion is incorrect in a material
respect, our opinion might be adversely affected and may not be relied upon.
This opinion is delivered as of the date hereof and we disclaim any
responsibility to update this opinion at any time following the date hereof.
The ability of Capstead REIT to qualify as a REIT for its 2001 taxable
year and subsequent taxable years will depend on future events, some of which
are not within the control of Capstead REIT. Additionally, it is not possible to
predict whether the statements, representations, warranties or assumptions on
which we have relied on to issue this opinion will continue to be accurate in
the future. Thus, the treatment of the Capstead REIT for federal income tax
purposes may be altered for the taxable years affected thereby.
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Capstead Mortgage Corporation
August 27, 2001
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We hereby consent to the reference to us under the caption "TAXATION"
in the Registration Statement, and to the filing of this opinion as an Exhibit
to the Registration Statement, without implying or admitting that we are experts
within the meaning of the Securities Act of 1933, as amended, with respect to
any part of the Registration Statement.
Very truly yours,
ANDREWS & KURTH L.L.P.