Morning Commentary: Redwood Trust’s new convertible notes due 2027 trade at 100-100.5

By Rebecca Melvin

Concord, N.H., June 7 – Redwood Trust Inc.’s new 7.75% five-year convertible notes were trading around 100 bid, 100.5 offered early Tuesday after the Mill Valley, Calif.-based housing credit company priced an upsized $200 million of the notes in the middle of coupon talk after the market close on Monday, according to a market source.

The deal was initially talked at $150 million size.

The underlying shares of the new convertibles were barely moving in early trade. Last they were up nearly 4 cents at $9.33.

In the markets overall, Target Corp.’s downbeat operating margin guidance rekindled inflation fears, according to sources. It was the second downward revision in less than a month from the retailer, which currently struggles with excess inventory.

All three Wall Street stock indexes opened lower, but the S&P 500 index and Nasdaq Composite index pulled slightly higher by late morning. The S&P 500 was last up 0.3% at 4,134.08.

The market was also dampened by new data showing that the U.S. trade deficit narrowed less than expected to $87.08 billion in April from $107.65 billion in March.

Shares of ConMed Corp. were directionless but last lower, but RealReal Inc. was higher at late morning, registering a 16 cent, or 5.5% gain, at $3.06.

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