Marin County's Redwood Trust upsizes stock offering to 12.5M shares
Real estate mortgage financier and investor Redwood Trust (NYSE: RWT) in Mill Valley set the price for common stock in an underwritten public offering.
The company on Tuesday announced an offering of 11 million shares and that evening upped the amount to 12.5 million and set the price at $16.08, which works out to gross proceeds of $201 million. The offering is set to close Friday, but underwriters of the offering will have 30 days to buy another 1.88 million shares, up from 1.65 million.
Among the possibilities for how proceeds from the sale would be used include funding pending or completed investment deals, making new investments in loans or securities, repaying $201 million in notes maturing in November, and reducing amounts borrowed for credit facilities.
J.P. Morgan, Wells Fargo Securities LLC, Goldman Sachs & Co. LLC and Credit Suisse Securities (USA) LLC are joint book-running managers for the proposed offering. JMP Securities LLC and Keefe, Bruyette & Woods Inc. are co-managers for the proposed offering.
In August, the firm announced a 6% dip in earnings in its fiscal second-quarter income, compared with the first fiscal quarter of the year.
The investor in residential property loans and a credit source for them reported $31 million in quarterly net income, down from $54 million in the first quarter and $33 million at midyear 2018. But half-year earnings, at $86 million, were 7.5% ahead of that pace last year.
“GAAP earnings per share declined in the second quarter, as we experienced a reduced benefit to investment fair value changes from spread tightening and lower realized gains from sales of available-for-sale securities,” the company wrote in a report released along with the financial results.
Generally Accepted Accounting Principles are financial industry standards for communicating company performance. GAAP earnings tend not to exclude unusual events, such as write-downs and restructuring.