Redwood Trust expects C-corporation conversion to lift Q4 2026 GAAP book value by $0.73-$0.77 per share
RWT•Redwood Trust expects its planned C-corporation conversion to increase fourth-quarter 2026 GAAP book value by $0.73-$0.77 per share. The conversion is expected to take effect in 2027 and unlock about $304 million in federal net operating loss carryforwards.
1. Conversion and tax benefits
Redwood Trust expects its planned C-corporation conversion to increase GAAP book value by $0.73-$0.77 per share in the fourth quarter of 2026. Effective for calendar 2027, the conversion is expected to unlock approximately $304 million in federal net operating loss carryforwards to reduce tax liabilities.
2. Dividend and exchange offer
The company expects to pay a quarterly common dividend of $0.02 per share beginning in December 2026, allowing greater earnings retention. It also plans to exchange $50 million of common stock for new 11% Series B Preferred Stock, which it expects to boost book value and earnings per share. The exchange offer is scheduled to launch during the week of November 9, 2026, with preferred shares offered at an anticipated premium.
