RAIT to price $125 million 4% 20-year convertibles with 12.5% premium

By Rebecca Melvin

New York, Dec. 4 - RAIT Financial Trust plans to price $125 million of 20-year convertible senior notes after the market close Wednesday that were talked to price at a 4% coupon and a 12.5% initial conversion premium. Terms were fixed, a syndicate source said.

There is an $18.75 million greenshoe for the registered, off-the-shelf offering, which was being sold via bookrunner Barclays.

RAIT intends to use the proceeds for working capital and general trust purposes, including potential repurchases of its outstanding 7% convertible senior notes due April 1, 2031. A portion of the proceeds will also be used to fund a capped call transaction with an affiliate of Barclays.

The notes are non-callable until Oct. 1, 2018, with puts in years five, 10 and 15, or Oct. 1 of 2018, 2023 and 2028.

There is standard dividend protection and change-of-control protection.

Philadelphia-based RAIT is a real estate investment trust focused on properties in Philadelphia and in the Baltimore to Washington, D.C., corridor.

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