RAIT greenshoe exercised, raising 6.875% convertibles to $425 million

By Angela McDaniels

Seattle, April 18 - RAIT Financial Trust said the underwriter of its upsized offering of 6.875% convertible senior notes due 2027 exercised its $75 million over-allotment option in full, raising the size of the deal to $425 million.

The company priced $350 million of the notes at par with an initial conversion premium of 27.5% and a conversion price of $34.86 via Bear, Stearns & Co. on April l2.

The size of the offering was originally $275 million with a $50 million greenshoe, and price talk had put the coupon at 6.75% to 7.25% and the initial conversion premium at 25% to 30%.

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 used a portion of the proceeds to repurchase $74.4 million of its common shares. The remainder of the net proceeds, estimated at $339.9 million, will be used for general purposes.

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