Redwood Trust Issues $912.5M in Senior Notes Due 2029

TL;DR

RWT just dropped $912.5M in new debt, due 2029. Big financing move.

AI Summary

On June 13, 2024, Redwood Trust, Inc. entered into a material definitive agreement related to the creation of a direct financial obligation. The company issued $912.5 million in Senior Notes due 2029, which represents a significant debt issuance for the real estate investment trust.

Why It Matters

This substantial debt issuance impacts Redwood Trust's leverage and future interest expenses, potentially affecting its profitability and financial flexibility.

Risk Assessment

Risk Level: medium — Issuing a large amount of debt increases financial leverage and interest expense, which can be a medium-term risk depending on market conditions and the company's ability to service the debt.

Key Numbers

• $912.5M — Senior Notes Issued (This represents a significant new debt obligation for Redwood Trust.)

Key Players & Entities

• Redwood Trust, Inc. (company) — Registrant
• June 13, 2024 (date) — Date of earliest event reported
• $912.5 million (dollar_amount) — Principal amount of Senior Notes issued
• 2029 (date) — Maturity year of Senior Notes

FAQ

Key Financial Figures

• $0.01 — h registered Common Stock, par value $0.01 per share RWT New York Stock Exchange
• $85.0 million — istered underwritten public offering of $85.0 million aggregate principal amount of the Compa
• $12.75 million — option to purchase up to an additional $12.75 million aggregate principal amount of Notes, to
• $81.67 million — ny from the Offering were approximately $81.67 million (or approximately $94.02 million if the
• $94.02 million — mately $81.67 million (or approximately $94.02 million if the Underwriters exercise their over

Filing Documents

• tm2417436d2_8k.htm (8-K) — 48KB
• tm2417436d2_ex1-1.htm (EX-1.1) — 367KB
• tm2417436d2_ex5-1.htm (EX-5.1) — 18KB
• tm2417436d2_ex5-2.htm (EX-5.2) — 22KB
• tm2417436d2_ex5-1img001.jpg (GRAPHIC) — 3KB
• tm2417436d2_ex5-1img002.jpg (GRAPHIC) — 2KB
• tm2417436d2_ex5-2img001.jpg (GRAPHIC) — 19KB
• tm2417436d2_ex5-2img002.jpg (GRAPHIC) — 16KB
• 0001104659-24-072814.txt ( ) — 806KB
• rwt-20240613.xsd (EX-101.SCH) — 3KB
• rwt-20240613_def.xml (EX-101.DEF) — 27KB
• rwt-20240613_lab.xml (EX-101.LAB) — 36KB
• rwt-20240613_pre.xml (EX-101.PRE) — 25KB
• tm2417436d2_8k_htm.xml (XML) — 6KB

01

Item 1.01 Entry Into a Material Definitive Agreement. Completion of Public Offering of Senior Notes On June 18, 2024, Redwood Trust, Inc. (the "Company") completed its registered underwritten public offering of $85.0 million aggregate principal amount of the Company's 9.00% Senior Notes due 2029 (the "Notes") pursuant to an underwriting agreement (the "Underwriting Agreement") with Morgan Stanley & Co. LLC ("Morgan Stanley"), Goldman Sachs & Co. LLC ("Goldman"), RBC Capital Markets, LLC ("RBC"), Wells Fargo Securities, LLC ("Wells Fargo"), Keefe, Bruyette & Woods, Inc. ("KBW") and Piper Sandler & Co. ("Piper Sandler"), as representatives of the several underwriters named therein (the "Offering"). In connection with the Offering, the Company granted the Underwriters (as defined below) a 30-day option to purchase up to an additional $12.75 million aggregate principal amount of Notes, to cover solely over-allotments. 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 June 13, 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 $81.67 million (or approximately $94.02 million if the Underwriters exercise their over-allotment option in full), 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) funding of the Company's business and investment activity, which may include funding the Company's residential and business purpose lending mortgage banking

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 June 13, 2024, the Company entered into the Underwriting Agreement with Morgan Stanley, Goldman, RBC, Wells Fargo, KBW and Piper Sandler, 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, $85.0 million aggregate principal amount of the Notes. In connection with the Offering, the Company granted the Underwriters a 30-day option to purchase up to an additional $12.75 million aggregate principal amount of Notes, to cover solely over-allotments. 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

Underwriting Agreement by and among Redwood Trust, Inc., Morgan Stanley & Co. LLC, Goldman Sachs & Co. LLC, RBC Capital Markets, LLC, Wells Fargo Securities, LLC, Keefe, Bruyette & Woods, Inc. and Piper Sandler & Co., dated June 13, 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 Fifth Supplemental Indenture, dated June 18, 2024, between Redwood Trust, Inc. and Wilmington Trust, National Association, as Trustee (incorporated by reference to Exhibit 4.4 to the Company's Registration Statement on Form 8-A, filed June 18, 2024). 4.3 Form of certificate representing the 9.00% Senior Note due 2029 (included as Exhibit A to the Fifth Supplemental Indenture, incorporated by reference to Exhibit 4.5 to the Company's Registration Statement on Form 8-A, dated June 18, 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: June 18, 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