Marin County's Redwood Trust plans to raise funds through 11M-share offering

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Real estate investment trust Redwood Trust in Mill Valley announced plans Tuesday to sell 11 million shares of its common stock in an underwritten public offering.

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.

Redwood expects to grant the underwriters a 30-day option to purchase up to an additional 1.65 million shares of its common stock in the 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.

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