Redwood Trust prices upsized $200 mln convertible debt deal

Monami

07/06/2022 14:03

** Shares of Redwood Trust Inc  RWT.N  tick up to $9.30
premarket as mortgage REIT raises more capital than planned
    ** Co late Mon priced $200 mln 7.75% 5-yr convertible bonds
(CB)  urn:newsml:reuters.com:*:nBw9fGyBxa
    ** CB conversion price of $10.45 represents 12.5% premium to
stock's last sale
    ** Shares on Mon fell 9.8% to $9.29, their biggest one-day
drop since Jun 2020, after co launched $150 mln deal
 urn:newsml:reuters.com:*:nL1N2XT1KV
    ** Piper Sandler trimmed its PT by $1 to $12, saying RWT on
Mon acknowledged some pressure on its residential and
single-family rental (SFR) mortgage banking due to spread
widening in the quarter
    ** But brokerage says while RWT not immune to higher rates
and spread widening, near-term stock reaction is
"over-discounting" these headwinds with it now trading at 0.82x
2Q 2022 estimated tangible book value ($11.32/sh)
    ** YTD, shares off ~30% through Mon close

 (Lance Tupper is a Reuters market analyst. The views expressed
are his own)
 ((lance.tupper@thomsonreuters.com
lance.tupper@tr.com 1-332-219-1430))