By Abigail W. Adams
Portland, Me., June 21 – Redwood Trust Inc. priced $200 million of six-year convertible notes after the market close on Wednesday with a coupon of 5.625% and an initial conversion premium of 10%, according to a company news release.
Pricing came at the cheap end of talk for a coupon of 5.125% to 5.625% and the rich end of talk for an initial conversion premium of 6% to 10%, according to a market source.
Credit Suisse Securities LLC, J.P. Morgan Securities LLC and Wells Fargo Securities LLC are joint bookrunners for the registered offering, which carries a greenshoe of $30 million.
The notes are non-callable. They are puttable upon a fundamental change. Upon conversion, holders will receive common stock with cash in lieu of fractional shares, according to a company news release.
Proceeds will be used to reduce borrowings under the company’s short-term residential loan warehouse facilities and its short-term real estate securities repurchase facilities, to fund investment initiatives and for general corporate purposes.
Redwood is a Mill Valley, Calif.-based specialty finance company focused on mortgage and other real estate-related assets.
| Issuer: | Redwood Trust Inc.
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| Securities: | Convertible senior notes
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| Amount: | $200 million
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| Greenshoe: | $30 million
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| Maturity: | July 15, 2024
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| Bookrunners: | Credit Suisse Securities LLC, J.P. Morgan Securities LLC and Wells Fargo Securities LLC
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| Coupon: | 5.625%
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| Price: | Par
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| Conversion premium: | 10%
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| Conversion price: | $18.26
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| Conversion rate: | 54.7645
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| Call options: | Non-callable
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| Put options: | Upon a fundamental change
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| Pricing date: | June 20
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| Settlement date: | June 25
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| Talk: | Coupon of 5.125% to 5.625% and initial conversion premium of 6% to 10%
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| Stock symbol: | NYSE: RWT
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| Stock price: | $16.60 at market close June 20
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| Market capitalization: | $1.25 billion
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