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MILL VALLEY, Calif. - Redwood Trust, Inc. (NYSE:RWT), a specialty finance company with a market capitalization of approximately $760 million, announced Thursday plans to offer $50 million in 7.75% convertible senior notes due 2027, subject to market conditions. The notes will be issued as a reopening of the same series the company originally issued in June 2022 and October 2024, of which $247,170,000 is currently outstanding. According to InvestingPro data, the company maintains strong liquidity with a current ratio of 7.28x.
The specialty finance company intends to use the proceeds for general corporate purposes, which may include funding its operating business and investment activity or repaying existing debt. Potential uses include funding its residential and business purpose lending mortgage banking businesses, acquiring mortgage-backed securities, making strategic investments, or repurchasing a portion of the 5.75% exchangeable senior notes due 2025 issued by one of its subsidiaries. The company offers a notable dividend yield of 12.27% and has maintained dividend payments for 31 consecutive years, as highlighted in InvestingPro’s analysis.
Redwood Trust focuses on providing liquidity to segments of the U.S. housing market not well served by government programs. The company operates through three residential housing-focused platforms - Sequoia, Aspire, and CoreVest - alongside its Redwood Investments portfolio.
The company is structured as a real estate investment trust (REIT) for tax purposes and is internally managed.
The announcement was made in a press release statement from the company.
In other recent news, Redwood Trust Inc. reported its Q2 2025 earnings, with an earnings per share (EPS) of $0.18, slightly exceeding the market expectations of $0.17. This earnings beat, however, did not prevent a pre-market decline in the company’s stock, indicating investor apprehension over wider financial issues and strategic changes. The company’s recent performance highlights ongoing challenges despite achieving a minor earnings surprise. Investors remain cautious as they assess the implications of the company’s current financial strategies. Redwood Trust’s financial results are a focal point for stakeholders looking to understand the company’s trajectory amid market uncertainties. The slight EPS outperformance is a positive signal, but broader concerns continue to weigh on investor sentiment. These developments are part of the latest updates surrounding Redwood Trust.
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