Preferred Stockholder of Newcastle Investment Corp. Calls Proposed Preferred Stock Amendments and Redemption Offer Inadequate

Costa Brava Partnership III L.P. ("Costa Brava"), a preferred stockholder of Newcastle Investment Corp. ("Newcastle") (NYSE: NCT) (NYSE: NCT.PrB) (NYSE: NCT.PrC) (NYSE: NCT.PrD), objects to Newcastle's proposed amendments to the rights of Newcastle's preferred stock and the offered redemption and does not at this time plan to vote for the amendment or to tender its shares. In making this announcement, Costa Brava first stresses that Costa Brava believes in the future of Newcastle.

Newcastle, citing market conditions, is seeking a consent solicitation amending certain key terms of such stock and has announced an offer to repurchase its outstanding preferred stock in an attempt to reduce or eliminate its outstanding preferred stock.

Newcastle is proposing a tender offer price of $6.76-7.19 per share for each of its series B, C and D preferred stock. Seth Hamot, a principal with Costa Brava, explained that "The offered price per share represents a substantial 75% discount to the $25 liquidation preference, a much deeper discount than one would typically expect."

In addition, Newcastle is proposing to deregister the preferred stock from the current listings on the New York Stock Exchange, thereby making the non-tendered shares difficult to trade and much less valuable. Mr. Hamot commented that "This is essentially an attempt to get rid of the preferred stockholders at a value that is significantly below the true value of the shares, coupled with the threat that if a preferred stockholder does not tender, the shares will be almost worthless. Essentially, Newcastle's preferred stockholders are paying a steep price in exchange for substantial benefits to Newcastle's common stockholders." Costa Brava believes that the proposed exchange offer and amendments are inadequate at best and coercing at worst and that preferred stockholders are giving up too much potential value by accepting the offer.

Mr. Hamot concluded that, "We don't want the company to cash out the preferred stockholders on the proposed terms at the benefit of the common stockholders. The deal certainly doesn't 'pencil out,' and it's too little money to just go away from what we believe is an opportunity to be part of a business with good potential."