Redwood Trust, Inc. (NYSE: RWT) will offer 6.25 million shares of common stock in an underwritten public offering at a price of $16.50 per share, according to a statement issued by the company on Tuesday.
The Mill Valley-based company, with a current market cap of $1.31 billion, expects to grant underwriters a 30-day option to purchase an additional 937,500 shares of its common stock in the offering.
The offering, expected to close on July 26, will result in gross proceeds of approximately $103.1 million, according to the statement.
Redwood Trust, a mortgage real estate investment trust (REIT), said it intends to use the net proceeds from the offering to fund business and investment activities. Possible uses include the purchase of residential mortgage loans and acquisition of mortgage-backed securities. The company said it may also fund new investment initiatives in single-family rental and multifamily housing sectors.
A portion of the proceeds from the offering may be used to temporarily reduce borrowings under Redwood’s short-term residential loan warehouse facilities and its short-term real estate securities repurchase facilities, according to the company.
Bookrunners and managers for the offering include J.P. Morgan Securities LLC, Wells Fargo Securities LLC, Goldman Sachs & Co. LLC and Credit Suisse Securities LLC.
Redwood Trust will join the S&P SmallCap 600, effective before the opening bell on July 25, according to a July 19 PRNewswire statement. Shares of Redwood Trust on Monday fell 2.88 to close at $16.69.
Kristin Brown, vice president, investor relations for Redwood Trust was not immediately available to comment on the share offering when contacted by the Business Journal.