Starwood Property Trust completes $550 million senior notes offering due 2031

Starwood Property Trust, Inc. (NYSE:STWD), a $6.95 billion market cap real estate investment trust with strong financial health metrics according to InvestingPro, announced Tuesday that it has closed a private offering of $550 million in aggregate principal amount of 5.750% unsecured senior notes due 2031. The notes were priced on September 29 and issued under an indenture dated October 14 between the company and The Bank of New York Mellon, acting as trustee. The company maintains robust liquidity with a current ratio of 13.57, indicating strong ability to meet short-term obligations.

The offering was conducted privately to qualified institutional buyers under Rule 144A and to non-U.S. persons in offshore transactions in accordance with Regulation S of the Securities Act of 1933. The notes are subject to transfer restrictions and may only be resold in transactions exempt from or not subject to registration requirements.

According to the company’s statement, Starwood Property Trust intends to allocate an amount equal to the net proceeds to finance or refinance recently completed or future eligible green and/or social projects. Pending allocation, the proceeds may be used for general corporate purposes, including repayment of outstanding indebtedness under the company’s repurchase facilities.

The senior notes are unsecured obligations of the company and will mature on January 15, 2031. They bear interest at 5.750% per year, with payments due semi-annually in arrears on January 15 and July 15, beginning July 15, 2026.

The notes are not initially guaranteed by any subsidiaries, but under certain conditions outlined in the indenture, one or more domestic subsidiaries may be required to guarantee the notes in the future. The notes rank equally with all existing and future senior unsecured indebtedness, are subordinated to secured debt to the extent of the value of the assets securing such debt, and are senior to any future subordinated debt.

Starwood Property Trust may redeem the notes before July 15, 2030, at a price equal to 100% of the principal plus a make-whole premium and accrued interest. After that date, the company may redeem the notes at par plus accrued interest. The company may also redeem up to 40% of the notes before January 15, 2029, using proceeds from certain equity offerings at 105.750% of the principal plus accrued interest.

The indenture includes covenants limiting additional indebtedness, requiring maintenance of certain unencumbered asset levels, and imposing conditions on mergers or consolidations. The information is based on a press release statement filed with the SEC. Notable for investors, the company has maintained dividend payments for 17 consecutive years, currently offering a significant 10.26% dividend yield. For deeper insights into Starwood Property Trust’s financial health and growth prospects, including additional ProTips and comprehensive analysis, explore the detailed Pro Research Report available on InvestingPro.

In other recent news, Starwood Property Trust reported its earnings for the second quarter of 2025, exceeding both earnings and revenue forecasts. The company achieved earnings per share of $0.43, surpassing the anticipated $0.40, which represents a 7.5% surprise. Revenue reached $444.28 million, significantly higher than the expected $198.73 million, reflecting a 123.56% surprise. Additionally, Starwood Property Trust announced a $500 million offering of unsecured senior notes due 2031. The company plans to use the proceeds to finance or refinance eligible green and social projects, with the option to use funds for general corporate purposes, including repaying outstanding debt. In a separate announcement, Starwood Property Trust also revealed another $500 million senior notes offering due 2028 in a private placement. These recent developments highlight Starwood’s efforts to strengthen its financial position and support sustainable initiatives.

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