Wells Fargo Bank NA on Aug. 20 handed out a notice of default to RAIT Financial Trust because it did not file its quarterly report for the fiscal quarter ended March 31 as required under the indenture between the two companies.
RAIT Financial Trust has an outstanding principal of $65.4 million in its 7.125% senior notes due 2019 and $56.3 million in its 7.625% senior notes due 2024. The real estate investment trust was not able to file its quarterly report with the Securities and Exchange Commission on time as it needed more time to determine whether investments in preferred equity interests should be classified as loans or as equity method investments in its financial statements.
The company said it will only be considered as defaulting on the notes if it fails to submit the report within 60 days after receiving the notice. If the company does default, it will pay additional interest at an annual rate of 0.50% of each principal amount of the notes for up to one year after the default.
