Redwood Trust Prices $175M Preferred Stock Offering

TL;DR

RWT priced $175M in preferred stock at $25/share. Looks to raise capital.

AI Summary

On March 18, 2024, Redwood Trust, Inc. announced the pricing of its previously announced underwritten public offering of 9.125% Series I Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock. The company intends to issue 7,000,000 shares of Series I Preferred Stock at a price to the public of $25.00 per share, expecting to raise approximately $175 million in gross proceeds.

Why It Matters

This offering provides Redwood Trust with additional capital, which could be used for general corporate purposes, potentially strengthening its financial position or funding future investments.

Risk Assessment

Risk Level: medium — Issuing preferred stock can dilute existing common shareholder value and increases the company's fixed obligations.

Key Numbers

• $175.0M — Gross Proceeds (From the public offering of preferred stock.)
• 7.0M — Shares Offered (Of Series I Preferred Stock.)
• 9.125% — Dividend Rate (Fixed rate for the Series I Preferred Stock.)

Key Players & Entities

• Redwood Trust, Inc. (company) — Registrant
• 9.125% Series I Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock (security) — Preferred stock being offered
• $175 million (dollar_amount) — Gross proceeds from the offering
• March 18, 2024 (date) — Date of the earliest event reported
• 7,000,000 (number) — Number of preferred shares to be issued
• $25.00 (dollar_amount) — Price per share of preferred stock

FAQ

Key Financial Figures

• $0.01 — ichregistered Common Stock, par value $0.01 per share RWT New York Stock Exchange
• $750 million — issued a press release relating to its $750 million strategic capital partnership with CPP
• $500 million — nership consists of both a newly formed $500 million joint venture (the " Joint Venture ") a
• $250 million — t venture (the " Joint Venture ") and a $250 million corporate secured financing facility.
• $500 million — ments and Redwood will contribute up to $500 million of equity to the Joint Venture, with an
• $7.76 — initial strike price of the Warrants is $7.76. The Warrants also contain a mandatory

Filing Documents

• tm249082d1_8k.htm (8-K) — 42KB
• tm249082d1_ex4-1.htm (EX-4.1) — 300KB
• tm249082d1_ex99-1.htm (EX-99.1) — 16KB
• tm249082d1_ex4-1img001.jpg (GRAPHIC) — 2KB
• tm249082d1_ex4-1img002.jpg (GRAPHIC) — 2KB
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• tm249082d1_ex4-1img006.jpg (GRAPHIC) — 2KB
• tm249082d1_ex4-1img007.jpg (GRAPHIC) — 3KB
• tm249082d1_ex99-1img001.jpg (GRAPHIC) — 3KB
• tm249082d1_ex99-1img002.jpg (GRAPHIC) — 3KB
• 0001104659-24-035894.txt ( ) — 666KB
• rwt-20240318.xsd (EX-101.SCH) — 3KB
• rwt-20240318_def.xml (EX-101.DEF) — 27KB
• rwt-20240318_lab.xml (EX-101.LAB) — 36KB
• rwt-20240318_pre.xml (EX-101.PRE) — 25KB
• tm249082d1_8k_htm.xml (XML) — 6KB

02. Unregistered Sales of Equity Securities

Item 3.02. Unregistered Sales of Equity Securities. The disclosure set forth in Item 8.01 below is incorporated by reference into this Item 3.02. The Warrants (as defined below) were issued to Canada Pension Plan Investment Board (" CPP Investments "), through its subsidiary CPPIB Credit Investments III Inc. in a private placement in reliance upon Section 4(a)(2) of the Securities Act of 1933, as amended.

01 Regulation FD Disclosure

Item 7.01 Regulation FD Disclosure. Redwood Trust, Inc. (" Redwood ") will host its Investor Day on Tuesday, March 19, 2024, from 2:00 pm Eastern Time to 5:00 pm Eastern Time. Redwood's Investor Day will be webcast live in listen-only mode through the Investor Day section of Redwood Trust's Investor Relations website at https://www.redwoodtrust.com/investor-relations/investor-day. To view the webcast, please go to Redwood's website at least 15 minutes before the beginning of the Investor Day to register and to download and install any needed audio software. A presentation related to the event will be posted to the Investor Day and Presentations section of Redwood's website. In addition, an audio replay of the Investor Day will also be available under the Investor Day section of Redwood's website following the event. In addition to outlining the Company's long-term vision and strategic outlook, the presentation will include: a review of the market opportunity and potential transactional volume management sees ahead for Redwood's Residential Consumer and Residential Investor Mortgage Banking platforms; 2024 run-rate targets management has for Redwood's revenue mix, capital allocation, capital deployment, operating metrics, general and administrative expense and non-GAAP earnings; and a summary of select first quarter of 2024 to date operating metrics.

01 Other Events

Item 8.01 Other Events. Joint Venture and Secured Financing Facility On March 19, 2024, Redwood issued a press release relating to its $750 million strategic capital partnership with CPP Investments. The partnership consists of both a newly formed $500 million joint venture (the " Joint Venture ") and a $250 million corporate secured financing facility. Joint Venture Pursuant to a joint venture agreement, dated as of March 18, 2024, together, CPP Investments and Redwood will contribute up to $500 million of equity to the Joint Venture, with an anticipated split of 80% from CPP Investments and 20% from Redwood . The Joint Venture will initially invest across the broad suite of Redwood's residential investor bridge and term loans. It is anticipated that the joint venture will procure third-party warehouse financing and securitize portions of its portfolio to augment purchasing power. Redwood will earn ongoing fees to oversee the administration of the Joint Venture and is entitled to earn additional performance fees upon realization of specified return hurdles . Secured Financing Facility Pursuant to a secured financing facility agreement, dated as of March 18, 2024, between Redwood and CPP Investments, CPP Investments will provide a secured financing facility with total committed financing capacity of up to $250 million to finance Redwood assets, which could include unencumbered assets, such as retained Residential Consumer and Residential Investor subordinate securities, as well as equity in operating subsidiaries. The facility will carry a two-year term, with a one-year extension option to Redwood and is structured with revolving capacity to support, among other things, the continued growth and scale of Redwood's mortgage banking platforms. Warrant Agreement Pursuant to a warrant agreement (the " Warrant Agreement "), dated as of March 18, 2024, between Redwood and CPP Investments, to further promote long-term strategic alignment, Redwood issued CPP In

01 Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits. (d) Exhibits. Exhibit No. Description 4.1 Warrant Agreement, dated as of March 18, 2024, between Redwood Trust. Inc. and Canada Pension Plan Investment Board ("CPP Investments"), through its subsidiary CPPIB Credit Investments III Inc. 99.1 Press Release dated March 19, 2024. 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: March 19, 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