Material Agreement (Form 8-K)

Item 1.01

Entry Into a Material Definitive Agreement.

Completion of Public Offering of Senior Notes

On January 17, 2025, Redwood Trust, Inc. (the "Company") completed its registered underwritten public offering of $90,000,000 aggregate principal amount of the Company's 9.125% Senior Notes due 2030 (the "Notes") pursuant to an underwriting agreement (the "Underwriting Agreement") with Morgan Stanley & Co. LLC ("Morgan Stanley"), Goldman Sachs & Co. LLC ("Goldman"), RBC Capital Markets, LLC ("RBC"), Wells Fargo Securities, LLC ("Wells Fargo"), Keefe, Bruyette & Woods, Inc. ("KBW") and Piper Sandler & Co. ("Piper Sandler"), as representatives of the several underwriters named therein (the "Offering"). In connection with the Offering, the Company granted the Underwriters (as defined below) a 30-day option to purchase up to an additional $13,500,000 aggregate principal amount of Notes, to cover solely over-allotments, if any.

The Notes have been registered pursuant to the Registration Statement on Form S-3 (Registration Statement No. 333-263301) (the "Registration Statement") filed with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Act"), including the prospectus supplement filed by the Company with the Commission pursuant to Rule 424(b) under the Act dated January 15, 2025 (the "Prospectus Supplement") to the prospectus contained in the Registration Statement dated March 4, 2022.

The resulting aggregate net proceeds to the Company from the Offering were approximately $86.52 million (or approximately $99.59 million if the Underwriters exercise their over-allotment option in full), after deducting underwriting discounts and estimated expenses. The Company intends to use the net proceeds from the Offering for general corporate purposes, which may include (i) funding of the Company's business and investment activity, which may include funding the Company's residential and business purpose lending mortgage banking businesses, acquiring mortgage-backed securities for our investment portfolio, funding other long-term portfolio investments, and funding strategic acquisitions and investments and/or (ii) the repayment of existing indebtedness, which may include the repurchase or repayment of a portion of the 5.75% exchangeable senior notes due 2025 issued by one of the Company's subsidiaries or the Company's 7.75% convertible senior notes due 2027.

Base Indenture and Supplemental Indenture

The Company issued the Notes under an indenture dated as of March 6, 2013 (the "Base Indenture") between the Company and Wilmington Trust, National Association, a national banking association, as trustee (the "Trustee"), as supplemented by the sixth supplemental indenture dated as of January 17, 2025, between the Company and the Trustee (the "Supplemental Indenture" and, together with the Base Indenture, the "Indenture").

The Notes bear interest at a rate of 9.125% per year, payable quarterly in arrears on March 1, June 1, September 1 and December 1 of each year, beginning on March 1, 2025. The Notes are senior unsecured obligations of the Company and rank equal in right of payment with the other existing and future senior unsecured indebtedness of the Company and senior in right of payment to any indebtedness that is contractually subordinated to the Notes. The Notes, however, are effectively subordinated in right of payment to the existing and future secured indebtedness of the Company to the extent of the value of the collateral securing such indebtedness, and structurally subordinated to the claims of the Company's subsidiaries' creditors, including trade creditors.

The Notes will mature on March 1, 2030 (the "Maturity Date"), unless earlier redeemed or repurchased by the Company.

Upon the occurrence of a change of control repurchase event (as defined in the Indenture) the Company must offer to repurchase the Notes at a purchase price equal to 101% of the principal amount plus accrued and unpaid interest to, but excluding, the repurchase date.

The Company may redeem the Notes at its option, in whole or in part, at any time and from time to time, on or after March 1, 2027 at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No "sinking fund" is provided for the Notes, which means that the Company is not required to redeem or retire the Notes periodically.

Public link

Please use the above public link if you want to share this noodl on another website.