Redwood Trust plans $150M convertible notes offering

MILL VALLEY, Calif. - Redwood Trust Inc. (NYSE:RWT) has announced intentions to issue $150 million in convertible senior notes due in 2030 through a private placement to qualified institutional buyers, as per a press release. The company will provide initial investors with the option to purchase an extra $22.5 million in notes within 13 days following the issuance.

These notes will be senior unsecured debts of Redwood, with the specific interest rates and offering prices yet to be finalized through discussions with the initial purchasers. Redwood plans to utilize a segment of the funds raised to repurchase some of its 2027 notes in privately negotiated transactions alongside the pricing of the offering.

An additional up to $20 million from the net proceeds will be earmarked for the repurchase of shares of its common stock in privately negotiated transactions. The remaining proceeds will be utilized for various general corporate purposes, which include funding its Sequoia, Aspire, and CoreVest mortgage banking platforms, acquiring assets for the Redwood Investments portfolio, and exploring strategic acquisitions and investments.

It is important to note that the offering has not been registered under the Securities Act of 1933 and will be executed under Rule 144A to qualify institutional buyers. Redwood Trust specializes in housing credit segments that are not adequately served by government programs and operates as a real estate investment trust.