Redwood Trust Inks Material Agreement, New Financial Obligation

TL;DR

**Redwood Trust just took on new debt/obligations, watch for details on impact.**

AI Summary

REDWOOD TRUST, INC. filed an 8-K on January 22, 2024, reporting an event that occurred on January 17, 2024, concerning an entry into a material definitive agreement and the creation of a direct financial obligation. This filing indicates that the company has undertaken new financial commitments, which could impact its balance sheet and future cash flows. For investors, this matters because new obligations can affect the company's financial health, potentially influencing its ability to pay dividends or fund future growth, and could signal a shift in its operational strategy.

Why It Matters

This filing signals new financial commitments for Redwood Trust, which could alter its risk profile and impact its capacity for future shareholder returns or investments.

Risk Assessment

Risk Level: medium — The filing indicates new financial obligations without specific dollar amounts or terms, creating uncertainty about the potential impact on the company's financial health.

Analyst Insight

Investors should monitor future filings or press releases from Redwood Trust for specific details regarding the nature, size, and terms of the new material definitive agreement and financial obligation to assess their impact on the company's financial health and future prospects.

Key Players & Entities

• REDWOOD TRUST, INC. (company) — the registrant filing the 8-K
• January 17, 2024 (date) — date of the earliest event reported
• January 22, 2024 (date) — date the 8-K was filed
• 001-13759 (other) — Commission File Number for Redwood Trust

Forward-Looking Statements

• Redwood Trust will provide more specific details about the material definitive agreement and financial obligation in its next quarterly or annual report. (REDWOOD TRUST, INC.) — high confidence, target: Q1 2024 Earnings Report

FAQ

Key Financial Figures

• $0.01 — ichregistered Common Stock, par value $0.01 per share RWT New York Stock Exchange
• $60.0 million — istered underwritten public offering of $60.0 million aggregate principal amount of the Compa
• $57.460 m — ny from the Offering were approximately $57.460 million, after deducting underwriting dis

Filing Documents

• tm243330d5_8k.htm (8-K) — 47KB
• tm243330d5_ex1-1.htm (EX-1.1) — 315KB
• tm243330d5_ex5-1.htm (EX-5.1) — 20KB
• tm243330d5_ex5-2.htm (EX-5.2) — 17KB
• tm243330d5_ex5-1img001.jpg (GRAPHIC) — 3KB
• tm243330d5_ex5-1img002.jpg (GRAPHIC) — 2KB
• tm243330d5_ex5-2img001.jpg (GRAPHIC) — 4KB
• tm243330d5_ex5-2img002.jpg (GRAPHIC) — 3KB
• 0001104659-24-005585.txt ( ) — 702KB
• rwt-20240117.xsd (EX-101.SCH) — 3KB
• rwt-20240117_def.xml (EX-101.DEF) — 26KB
• rwt-20240117_lab.xml (EX-101.LAB) — 36KB
• rwt-20240117_pre.xml (EX-101.PRE) — 25KB
• tm243330d5_8k_htm.xml (XML) — 5KB

.01 Entry Into a Material Definitive Agreement

Item 1 .01 Entry Into a Material Definitive Agreement. Completion of Public Offering of Senior Notes On January 22, 2024, Redwood Trust, Inc. (the "Company") completed its registered underwritten public offering of $60.0 million aggregate principal amount of the Company's 9.125% Senior Notes due 2029 (the "Notes") pursuant to an underwriting agreement (the "Underwriting Agreement") with Wells Fargo Securities, LLC ("Wells Fargo"), Goldman Sachs & Co. LLC ("Goldman"), Morgan Stanley & Co. LLC ("Morgan Stanley"), RBC Capital Markets, LLC ("RBC") and Keefe, Bruyette & Woods, Inc. ("KBW"), as representatives of the several underwriters named therein (the "Offering"). The Notes have been registered pursuant to the Registration Statement on Form S-3 (Registration Statement No. 333-263301) (the "Registration Statement") filed with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Act"), including the prospectus supplement filed by the Company with the Commission pursuant to Rule 424(b) under the Act dated January 17, 2024 (the "Prospectus Supplement") to the prospectus contained in the Registration Statement dated March 4, 2022. The resulting aggregate net proceeds to the Company from the Offering were approximately $57.460 million, after deducting underwriting discounts and estimated expenses. The Company intends to use the net proceeds from the Offering for general corporate purposes, which may include (i) the repurchase or repayment of a portion of the Company's 5.625% convertible senior notes due 2024, the 5.75% exchangeable senior notes due 2025 issued by one of its subsidiaries or the Company's 7.75% convertible senior notes due 2027, and/or (ii) funding of the Company's business and investment activity, which may include funding the Company's residential and business purpose lending mortgage banking businesses, acquiring mortgage-backed securities for the Company's investment portfolio, funding other l

03

Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant. The information required by this Item 2.03 relating to the Notes and the Indenture is contained in Item 1.01 above and is incorporated herein by reference.

01

Item 8.01 Other Events. On January 17, 2024, the Company entered into the Underwriting Agreement with Wells Fargo, Goldman Sachs, Morgan Stanley, RBC and KBW, as representatives of the several underwriters named therein (collectively, the "Underwriters"). Subject to the terms and conditions of the Underwriting Agreement, the Company agreed to sell to the Underwriters, and the Underwriters agreed to purchase from the Company, $60.0 million aggregate principal amount of the Notes. Pursuant to the terms of the Underwriting Agreement, the parties have agreed to indemnify each other against certain liabilities, including liabilities under the Act. A copy of the Underwriting Agreement is filed as Exhibit 1.1 to this Current Report. Attached as Exhibit 5.1 to this Current Report is a copy of the opinion of Latham & Watkins LLP relating to the validity of the Notes sold in the Offering. Attached as Exhibit 5.2 to this Current Report is a copy of the opinion of Venable LLP regarding certain Maryland law issues.

Financial Statements and Exhibits

Financial Statements and Exhibits. (d) Exhibits. Exhibit No. Description 1.1 Underwriting Agreement by and among Redwood Trust, Inc., Wells Fargo Securities, LLC, Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, RBC Capital Markets, LLC and Keefe, Bruyette & Woods, Inc., dated January 17, 2024. 4.1 Indenture, dated March 6, 2013, between Redwood Trust, Inc. and Wilmington Trust, National Association, as Trustee (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K/A, filed March 6, 2013). 4.2 Fourth Supplemental Indenture, dated January 22, 2024, between Redwood Trust, Inc. and Wilmington Trust, National Association, as Trustee (incorporated by reference to Exhibit 4.2 to the Company's Registration Statement on Form 8-A, filed January 22, 2024). 4.3 Form of certificate representing the 9.125% Senior Note due 2029 (included as Exhibit A to the Fourth Supplemental Indenture, incorporated by reference to Exhibit 4.3 to the Company's Registration Statement on Form 8-A, dated January 22, 2024). 5.1 Opinion of Latham & Watkins LLP. 5.2 Opinion of Venable LLP. 23.1 Consent of Latham & Watkins LLP (included in Exhibit 5.1). 23.2 Consent of Venable LLP (included in Exhibit 5.2). 104 Cover Page Interactive Data File (embedded within the inline XBRL document)

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: January 22, 2024 REDWOOD TRUST, INC. By: /s/ Brooke E. Carillo Name: Brooke E. Carillo Title: Chief Financial Officer

View Full Filing

View this 8-K filing on SEC EDGAR