Colony Financial Announces Pricing of $130 Million of 8.50% Perpetual Preferred Stock Offering

LOS ANGELES--(BUSINESS WIRE)--

Colony Financial, Inc. (the "Company") CLNY today announced that it has sold 5,200,000 shares of 8.50% Series A Cumulative Perpetual Preferred Stock with a liquidation preference of $25 per share. In addition, the Company has granted the underwriters a 30-day option to purchase an additional 780,000 shares of the 8.50% Series A Cumulative Perpetual Preferred Stock on the same terms and conditions to cover over-allotments, if any. The offering is expected to close on or about March 20, 2012, subject to customary closing conditions. Barclays Capital Inc, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. LLC and UBS Securities LLC are acting as joint book-running managers for the offering. RBC Capital Markets, LLC and Stifel, Nicolaus & Company, Incorporated are acting as co-managers.

The Company estimates that the net proceeds from the offering, after the underwriting discounts and commissions and estimated offering expenses payable by the Company, will be approximately $125.6 million, or approximately $144.5 million if the underwriters' overallotment option is exercised in full. The Company intends to use the proceeds from the offering to repay amounts outstanding under the Company's revolving credit facility and the balance, if any, for working capital and general corporate purposes.

A registration statement relating to these securities has been declared effective by the Securities and Exchange Commission. The offering will be made only by means of a prospectus supplement and prospectus, which have been filed with the Securities and Exchange Commission. A copy of the prospectus supplement and prospectus related to the offering can be obtained by contacting Barclays Capital Inc., c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, telephone: (888) 603-5847 or by email at Barclaysprospectus@broadridge.com; Merrill Lynch, Pierce, Fenner & Smith Incorporated, 4 World Financial Center, New York, NY 10080, Attention: Prospectus Department, telephone: 1-800-294-1322 or by e-mail at dg.prospectus_requests@baml.com; Morgan Stanley & Co. LLC, 180 Varick Street, 2nd Floor, New York, NY 10014, Attention: Prospectus Department, telephone: (866) 718-1649 or by e-mail at prospectus@morganstanley.com; or UBS Securities LLC, 299 Park Avenue, New York, NY 10171, Attention: Prospectus Specialist, telephone: 877-827-6444, ext. 561 3884.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of any securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Colony Financial, Inc.

Colony Financial, Inc. is a real estate finance and investment company that is focused primarily on acquiring and originating commercial real estate loans and real estate-related debt at attractive risk-adjusted returns. Secondary debt purchases may include performing, sub-performing or non-performing loans (including loan-to-own strategies). Colony Financial has elected to be taxed as a real estate investment trust, or REIT, for U.S. federal income tax purposes. Colony Financial is a component of the Russell 2000® and the Russell 3000® indices.

Forward-Looking Statements

This press release may contain forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as "may," "will," "should," "expects," "intends," "plans," "anticipates," "believes," "estimates," "predicts," or "potential" or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and contingencies, many of which are beyond the Company's control, that may cause actual results to differ significantly from those expressed in any forward-looking statement.

All forward-looking statements reflect the Company's good faith beliefs, assumptions and expectations, but they are not guarantees of future performance. Furthermore, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. For a further discussion of these and other factors that could cause the Company's future results to differ materially from any forward-looking statements, see the section entitled “Risk Factors” in the Company's Annual Report on Form 10-K for the year ended December 31, 2011 filed with the Securities and Exchange Commission on March 9, 2012 and other risks described in documents subsequently filed by the Company from time to time with the SEC.