By Rebecca Melvin
New York, Sept. 20 – RWT Holdings Inc., a subsidiary of Redwood Trust Inc., has sold $175 million of 5.75% exchangeable senior notes due 2025 with an initial exchange premium of 10%, according to a company news release.
The Rule 144A offering has an option for up to an additional $26.25 million of exchangeables.
Upon exchange, holders will receive Redwood common stock shares. Holders may put the exchangeables in the event of a fundamental change at par plus accrued and unpaid interest.
Proceeds are earmarked for general corporate purposes, which may include the repayment of debt, including all or a portion the $201 million of RWT Holdings’ 5.625% exchangeable senior notes due 2019. RWT Holdings may also distribute a portion of the proceeds to Redwood to fund its business and investment activity, which may include funding pending or recently completed investment transactions.
In addition, Redwood may use a portion of proceeds to fund new investment opportunities in portfolios of residential, multifamily, or business purpose residential loans or securities, to make other portfolio investments, to fund its mortgage banking business and for general corporate purposes.
Redwood may also use all or a portion of proceeds to temporarily reduce borrowings under its short-term residential or business purpose loan warehouse facilities and its short-term real estate securities repurchase facility and Redwood may subsequently reborrow amounts under such facilities to fund these activities.
Redwood Trust is a Mill Valley, Calif.-based real estate investment trust.
| Issuer: | RWT Holdings Inc.
|
| Obligor: | Redwood Trust Inc.
|
| Securities: | Exchangeable senior notes
|
| Amount: | $175 million
|
| Greenshoe: | $26.25 million
|
| Maturity: | Oct. 1, 2025
|
| Coupon: | 5.75%
|
| Exchange premium: | 10%
|
| Exchange price: | $18.12
|
| Exchange rate: | 55.1967
|
| Call options: | Non-callable
|
| Put options: | Upon a fundamental change
|
| Pricing date: | Sept. 19
|
| Settlement date: | Sept. 24
|
| Distribution: | Rule 144A
|
| Stock symbol: | NYSE: RWT
|
| Stock price: | $16.47 at market close Sept. 19
|
| Market capitalization: | $1.87 billion
|
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