Redwood Trust Inc. plans to offer $225.0 million of convertible senior notes due 2023 in an underwritten public offering, subject to market and other conditions.
The company expects to grant the underwriters a 30-day option to purchase up to an additional $33.8 million of notes to cover overallotments, if any. The notes will be senior unsecured obligations of Redwood.
Redwood expects to use the net proceeds of the offering for general corporate purposes, which may include the repayment of debt, including a portion of the $250 million of its outstanding 4.625% convertible senior notes due 2018, and to fund its business and investment activity. Part of the net proceeds may also be used to temporarily reduce borrowings under its short-term residential loan warehouse facilities and its short-term real estate securities repurchase facilities.
J.P. Morgan Securities LLC and Wells Fargo Securities LLC are acting as joint book-running managers for the proposed offering. Goldman Sachs & Co. LLC is acting as lead manager, and JMP Securities LLC is acting as co-manager.