Redwood Trust prices $50 million convertible notes offering

Redwood Trust Inc. (NYSE: RWT) announced it has priced a $50 million offering of 7.75% convertible senior notes due 2027 through a direct placement to certain investors. The notes represent a reopening of existing convertible notes originally issued in June 2022 and October 2024, bringing the total outstanding principal amount to $297.17 million.

The offering is expected to close on August 25, 2025, subject to closing conditions. Interest on the notes is payable semi-annually on June 15 and December 15, with maturity on June 15, 2027.

The conversion rate is set at 95.6823 shares per $1,000 principal amount of notes, equivalent to a conversion price of approximately $10.45 per share. This represents a 78% premium to Redwood's common stock closing price on August 21, 2025. Before March 15, 2027, holders may convert notes only upon certain events, while conversion is permitted at any time thereafter until maturity.

Redwood may settle conversions in cash or a combination of cash and stock, with cash payment required for at least the principal amount. The company has redemption rights under specific circumstances, including to preserve its real estate investment trust status.

The company estimates net proceeds of approximately $49.2 million after expenses. Redwood plans to use proceeds for general corporate purposes, including funding its mortgage banking businesses, acquiring mortgage-backed securities, and potentially repaying existing debt including 5.75% exchangeable senior notes due 2025.

The offering is made under an effective shelf registration statement with the Securities and Exchange Commission.

You May Also Be Interested In

• CoStar Group acquires Zonda for $800M, adding new home data
• Gossamer Bio raises up to $250M in private placement for PAH drug
• reAlpha completes $8.5M InstaMortgage acquisition