Redwood shares fall after upsized convertible offering
Mortgage REIT Redwood Trust's RWT.N shares were down 2.1% at $3.55 in early Friday trading after the above-planned raise.
Mill Valley, California-based Redwood early Friday announced pricing a private offering of $185 million in 7% convertible bonds due Sept. 15, 2030.
The conversion price of $4.90 represents a 35% premium to the stock's last sale of $3.63 on Thursday.
The stock on Thursday plunged nearly 15% to more than a six-year low after the company launched a $150 million offering.
The company intends to use approximately $129 million of the net offering proceeds to repurchase a portion of its 7.75% convertible bonds due 2027 and $20 million to repurchase its shares in privately negotiated transactions.
The remainder is earmarked to fund its operating businesses, mortgage banking platforms, acquire assets for its investment portfolio, and potential acquisitions.
The stock is now down 35% year to date.
Six of eight analysts rate the stock "strong buy" or "buy" and two rate it "hold," with a median price target of $6, according to LSEG.
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