MILL VALLEY, Calif.–(BUSINESS WIRE)–Redwood Belief, Inc. (NYSE: RWT; Redwood (NYSE:) or the Firm) at present introduced that it priced roughly $40 million combination principal quantity of its 7.75% convertible senior notes due 2027 (the Notes) in a personal providing to individuals fairly believed to be certified institutional patrons pursuant to Rule 144A underneath the Securities Act of 1933, as amended (the Securities Act). The Notes will likely be issued as a reopening of, and will likely be a part of the identical collection as, the 7.75% convertible senior notes due 2027 that the Firm initially issued in June 2022 (the Preliminary Notes), of which $207,410,000 combination principal quantity is at the moment excellent. Whereas the Notes will initially commerce underneath a Rule 144A CUSIP quantity, the Firm expects that when de-legended, the Notes will commerce with the identical CUSIP quantity because the Preliminary Notes. The providing is anticipated to shut on October 11, 2024, topic to the satisfaction of sure closing situations.
Curiosity on the Notes is payable semi-annually in arrears on June 15 and December 15 of every yr; the Notes will mature on June 15, 2027, except earlier repurchased, redeemed or transformed. Upon conversion, holders of the Notes will obtain shares of Redwood’s frequent inventory, along with money in lieu of any fractional share. If Redwood undergoes a elementary change (as outlined within the indenture governing the Notes), topic to sure situations, holders of the Notes could require Redwood to repurchase all or a part of their Notes for money in an quantity equal to the principal quantity of the Notes to be repurchased, plus accrued and unpaid curiosity, if any.
Earlier than March 15, 2027, holders have the appropriate to transform their Notes solely upon the incidence of sure occasions. From and after March 15, 2027, holders could convert their Notes at any time at their election till the shut of enterprise on the second scheduled buying and selling day instantly earlier than the maturity date. Redwood has the appropriate to elect to settle conversions both totally in money or in a mixture of money and shares of its frequent inventory. Nevertheless, upon conversion of any Notes, the conversion worth, which will likely be decided over a interval of a number of buying and selling days, will likely be paid in money as much as no less than the principal quantity of the Notes being transformed. Any conversions of Notes into shares of Redwood frequent inventory will likely be topic to sure possession limitations set forth in Redwood’s constitution paperwork. The conversion price is 95.6823 shares of frequent inventory per $1,000 principal quantity of Notes, equal to a conversion worth of roughly $10.45 per share, which is an roughly 38% premium to the closing worth of Redwood’s frequent inventory on October 9, 2024. The conversion price and conversion worth are topic to customary anti-dilution changes.
Redwood has the appropriate to redeem the Notes, in entire or partly, at its possibility at any time previous to maturity to the extent essential to protect its standing as an actual property funding belief for U.S. federal earnings tax functions. As well as, topic to sure limitations, Redwood has the appropriate to redeem the Notes, in entire or partly, at its possibility on or after June 16, 2025, however provided that the final reported sale worth per share of Redwood’s frequent inventory exceeds 130% of the conversion worth for a specified time period. The redemption worth for any Observe known as for redemption will likely be a money quantity equal to the principal quantity of the Notes to be redeemed, plus accrued and unpaid curiosity, if any.
Redwood estimates that the online proceeds it is going to obtain from the providing will likely be roughly $38.2 million, after deducting the preliminary purchasers’ reductions and commissions and estimated providing bills payable by Redwood. Redwood intends to make use of the online proceeds from the providing to repurchase a portion of the at the moment excellent 5.75% exchangeable senior notes due 2025 beforehand issued by one in every of its subsidiaries (the 2025 Notes) in privately negotiated transactions now and again. Redwood intends to make use of the rest of the online proceeds, if any, for basic company functions.
The phrases of the 2025 Notes repurchases will rely upon a number of components, together with the market worth of Redwood’s frequent inventory and the buying and selling worth of the 2025 Notes on the time of every such repurchase of the 2025 Notes. If, for any cause, Redwood doesn’t use the online proceeds from this providing to repurchase a portion of the 2025 Notes, it could count on to make use of the online proceeds for basic company functions.
The supply and sale of the Notes and any shares of frequent inventory issuable upon conversion of the Notes haven’t been, and won’t be, registered underneath the Securities Act or some other securities legal guidelines, and the Notes and any such shares can’t be supplied or offered besides pursuant to an exemption from, or in a transaction not topic to, the registration necessities of the Securities Act and some other relevant securities legal guidelines. This press launch doesn’t represent a proposal to repurchase any 2025 Notes or to promote, or the solicitation of a proposal to purchase, the Notes or any shares of frequent inventory issuable upon conversion of the Notes, nor will there be any sale of the Notes or any such shares, in any state or different jurisdiction by which such supply, sale or solicitation can be illegal.
About Redwood Belief
Redwood Belief, Inc. (NYSE: RWT) is a specialty finance firm centered on a number of distinct areas of housing credit score the place we offer liquidity to rising segments of the U.S. housing market not nicely served by authorities packages. We ship personalized housing credit score investments to a various mixture of buyers by way of our best-in-class securitization platforms, whole-loan distribution actions, and our publicly traded shares. We function our enterprise in three segments: Residential Client Mortgage Banking, Residential Investor Mortgage Banking and Funding Portfolio. By way of RWT Horizons ®, our enterprise investing initiative, we put money into early-stage firms which have a direct nexus to our working platforms. Moreover, by way of Aspire, our house fairness funding (HEI) platform, we straight originate HEI to householders. Our aim is to offer enticing returns to shareholders by way of a secure and rising stream of earnings and dividends, capital appreciation, and a dedication to technological innovation that facilitates risk-minded scale. Redwood Belief is internally managed and structured as an actual property funding belief (REIT) for tax functions.
CAUTIONARY STATEMENT: This press launch accommodates forward-looking statements inside the that means of the secure harbor provisions of the Personal Securities Litigation Reform Act of 1995, similar to statements associated to the providing and the anticipated use of the online proceeds. Ahead-looking statements contain quite a few dangers and uncertainties. Redwood’s precise outcomes could differ materially from these projected, and Redwood cautions buyers to not place undue reliance on the forward-looking statements contained on this launch. Ahead-looking statements will not be historic in nature and might be recognized by phrases similar to anticipate, estimate, will, ought to, count on, imagine, intend, search, plan, and related expressions or their unfavourable varieties, or by references to technique, plans, or intentions. These forward-looking statements are topic to dangers and uncertainties, together with, amongst different issues, these described in Redwood’s filings with the Securities and Trade Fee. Redwood undertakes no obligation to replace or revise any forward-looking statements, whether or not because of new info, future occasions, or in any other case.
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Kaitlyn Mauritz
Head of Investor Relations
Cellphone: 866-269-4976
E mail: investorrelations@redwoodtrust.com
Supply: Redwood Belief, Inc.
