I posted in another thread that $1.10 looked good to me. Their preference to pay a consistent dividend basically means the new dividend rate will be an indication of management's projections for 2013, rather than a backward looking calc based on actual Q4 earnings. Since they've said in investor conferences that they expect spreads to increase as early as March, my guess is that the dividend will come in higher than Q4's earnings might support.
I'm also not sure management can issue shares below book. I know some corporate charters prevent that (anyone who's followed this sector has to have seen management teams requesting permission to issue below book), but I don't know if AGNC's is one of those. If it is, an SPO may not be an option at these price levels.