RAIT talks $275 million 20-year convertibles at 6.75%-7.25%, up 25%-30%, to price Thursday

By Kenneth Lim

Boston, April 11 - RAIT Financial Trust plans to price $275 million of 20-year convertible senior unsecured notes on Thursday after the market closes, talked at a coupon of 6.75% to 7.25% and an initial conversion premium of 25% to 30%.

The convertibles will be offered at par.

There is an over-allotment option for a further $50 million.

Bear, Stearns & Co. is the bookrunner of the Rule 144A offering.

The convertibles will be non-callable for the first five years and may be put in years five, 10 and 15.

There will be a contingent conversion trigger at 120% of the conversion price.

The convertibles will have dividend and takeover protection.

RAIT subsidiaries RAIT Partnership LP and RAIT Asset Holdings LLC will guarantee the notes.

RAIT, a Philadelphia-based real estate investment trust that provides debt financing options to the real estate industry, said it will use the proceeds of the deal to concurrently buy back up to $75 million of its common shares and to fund general purposes.

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