Redwood Trust (RWT) Prices $90M Notes Offering

Redwood Trust, Inc. (NYSE: RWT) today announced the pricing of an underwritten public offering of $90,000,000 aggregate principal amount of its 9.125% senior notes due 2030 (the “Notes”). In connection with the offering, Redwood granted the underwriters a 30-day option to purchase up to an additional $13,500,000 aggregate principal amount of Notes, to cover over-allotments. The offering is expected to close on January 17, 2025, subject to the satisfaction of certain closing conditions.

Redwood intends to apply to list the Notes on the New York Stock Exchange under the symbol “RWTP” and, if the application is approved, trading of the Notes on the New York Stock Exchange is expected to begin within 30 days after the Notes are first issued. The Notes have received an investment grade rating of BBB- from Egan-Jones Ratings Company, an independent, unaffiliated rating agency.

Redwood intends to use the net proceeds from the offering for general corporate purposes, which may include (i) funding of Redwood’s business and investment activity, which may include funding Redwood’s residential and business purpose lending mortgage banking businesses, acquiring mortgage-backed securities for Redwood’s 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 its subsidiaries or Redwood’s 7.75% convertible senior notes due 2027.

The Notes will be senior unsecured obligations of Redwood. The Notes will bear interest at a rate equal to 9.125% per year, payable quarterly in arrears on March 1, June 1, September 1 and December 1 of each year, beginning on June 1, 2025. The Notes will mature on March 1, 2030. The Notes will be issued in minimum denominations of $25 and integral multiples of $25 in excess thereof or in units.

Redwood will have the right to redeem the Notes, in whole or in part, at its option at any 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. Upon the occurrence of a change of control, Redwood will be required to make an offer to repurchase all outstanding Notes at a price equal to 101% of the principal amount of the Notes, plus accrued and unpaid interest to, but excluding, the repurchase date.

Morgan Stanley & Co. LLC, Goldman Sachs & Co. LLC, RBC Capital Markets, LLC, Wells Fargo Securities, LLC, Keefe, Bruyette & Woods, Inc. and Piper Sandler & Co., are acting as joint book-running managers for the proposed offering. Citizens JMP Securities, LLC is acting as co-manager for the proposed offering.

The public offering will be made pursuant to an automatic shelf registration statement on Form S-3 that was filed by Redwood with the Securities and Exchange Commission (“SEC”) and became effective on March 4, 2022. A preliminary prospectus supplement and accompanying prospectus relating to and describing the terms of the offering have been filed with the SEC and are available on the SEC’s website at www.sec.gov. Copies of the preliminary prospectus supplement and accompanying prospectus may be obtained by contacting:

Morgan Stanley & Co. LLC
180 Varick Street
New York, NY 10014
Attention: Prospectus Department
Or by telephone: (866) 718-1649
Or by email: [email protected]

Goldman Sachs & Co. LLC
Attention: Prospectus Department
200 West Street
New York, NY 10282
Or by telephone: 866-471-2526
Or by email: [email protected]

RBC Capital Markets, LLC
Attention: Transaction Management
Brookfield Place
200 Vesey Street, 8th Floor
New York, NY 10281-8098
Or by telephone: 866-375-6829
Or by email: [email protected]

Wells Fargo Securities, LLC
608 2nd Avenue South, Suite 1000
Minneapolis, MN 55402
Attention: WFS Customer Service
Or by telephone: (800) 645-3751
Or by email: [email protected]

Keefe, Bruyette & Woods, Inc.
Attention: Capital Markets
787 Seventh Avenue
4th Floor
New York, NY 10019
Or by telephone: 800-966-1559

Piper Sandler & Co.
Attention: Debt Capital Markets
1251 Avenue of the Americas, 6th Floor
New York, NY 10020
Or by email: [email protected]

This announcement shall not constitute an offer to sell or a solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction.

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