MILL VALLEY, Calif. – Redwood Trust, Inc. (NYSE: RWT), a special financial company with a capitalization of 849 million dollars, announced the value of the public offering at 90 million dollars in senior notes and 9.125% of interest, growth. March 1, 2030. According to InvestingPro data, the company maintains liquidity and a current ratio of 76.5x, indicating strong financial health. The company has also maintained an impressive record of 30 years of consistent dividend payouts. The company also granted the underwriters a 30-day option to purchase up to $13.5 million in notes to pay additional shares. The offering is expected to close on January 17, 2025, subject to customary closing conditions.
The notes, which will be listed on the New York Stock Exchange under the symbol “RWTP” if approved, are set to begin trading within a month of issuance. Egan-Jones Ratings Company has assigned an investment grade rating of BBB-. Interest on the notes will be payable quarterly beginning on June 1, 2025. Currently trading at $6.40 per share, Redwood Trust offers investors an impressive return of 11.46%. For in-depth information on Redwood Trust's financial metrics and potential growth, InvestingPro subscribers have access to 30 additional financial metrics and exclusive ProTips.
Redwood Trust plans to use the proceeds for general corporate purposes, which may include financing mortgage banking businesses, acquiring mortgage-backed securities, making other long-term investments, strategic acquisitions, and paying down existing debt. This may include repurchasing or redeeming portions of the 5.75% senior notes convertible due 2025 or the 7.75% senior notes convertible due 2027.
The notes will be senior unsecured obligations of Redwood Trust and will be available in minimum denominations of $25 or multiples thereof. Redwood reserves the right to redeem the notes, in whole or in part, at any time after March 1, 2027, in principal amount and accrued interest. Additionally, in the event of a change of control, Redwood must offer to repurchase all outstanding notes at 101% of their principal, plus accrued interest.
Joint bookkeepers on the offering include Morgan Stanley (NYSE:) & Co. LLC, Goldman Sachs & Co. LLC, RBC Capital Markets, LLC, Wells Fargo (NYSE:) Securities, LLC, Keefe, Bruyette & Woods, Inc., and Piper Sandler & Co., and Citizens JMP Securities, LLC acted as co-managers.
The offering is made under an automatic shelf registration statement filed with the SEC on March 4, 2022. The terms of the offering are described in the preliminary prospectus and the accompanying prospectus available on the SEC website.
This announcement comes with a disclaimer that it does not constitute an offer to sell or a solicitation of an offer to buy securities, and there will not be any sale of these securities in any country or jurisdiction where such offer, solicitation, or advertisement is made. Not valid prior to registration or certification of education under the security laws of that state or jurisdiction. Based on InvestingPro's fair value analysis, the stock currently appears overvalued, trading at a price to book of 0.73. Investors seeking comprehensive analysis can access Redwood Trust's detailed Pro Research Report, part of InvestingPro that covers more than 1,400 US stocks.
The information provided in this article is based on a publication statement of Redwood Trust, Inc.
In other recent news, Redwood Trust Inc (NYSE: ). reported mixed financial results for the fourth quarter of 2024, with preliminary data showing a decline in book value per share. This decrease was attributed to higher interest rates and a decrease in additional debt-related assumptions on bridge loans. Despite these challenges, Redwood Trust received 2.2 billion loans during Q3 and announced a partnership with CPP Investments, showing its focus on non-agency housing finance solutions for 2025.
In a recent move, Redwood Trust expanded its home equity platform, Aspire, to include other loan products, and rebranded its Sequoia jumbo loan platform. The company also announced executive compensation packages for its top executives, including CEO Christopher J. Abate, as part of its strategy to promote and retain key leadership.
However, JPMorgan downgraded Redwood Trust stock from Overweight to Neutral due to potential challenges in the company's credit performance. Apart from this, Redwood Trust has reported an increase in earnings available for distribution up to $25 million in Q3 2024. This is a recent development, which reflects the ongoing operations and financial performance of Redwood Trust.
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