Starwood Property Trust Announces Pricing of Common Stock Offering

Rhea-AI Summary

Starwood Property Trust (NYSE:STWD) has announced the pricing of a public offering of 25.5 million shares of common stock, expected to raise approximately $508 million in gross proceeds. The underwriters have a 30-day option to purchase an additional 3.825 million shares, which could increase total proceeds to $584 million.

The offering, expected to close on July 18, 2025, will primarily fund the company's pending acquisition of Fundamental Income Properties, LLC. Additional proceeds may be used to originate commercial mortgage loans, purchase target assets, or for general corporate purposes including debt repayment. BofA Securities and Wells Fargo Securities are serving as the offering's underwriters.

Positive

• Expected gross proceeds of $508 million (up to $584 million with additional shares)
• Strategic acquisition of Fundamental Income Properties to expand portfolio
• Flexibility in use of proceeds for commercial mortgage loans and debt repayment

Negative

• Significant shareholder dilution with 25.5 million new shares being issued
• Additional potential dilution if underwriters exercise their 30-day option for 3.825M shares

Insights

Financial Analyst

STWD raises $508M through stock offering to fund acquisition of Fundamental Income Properties, diluting shareholders but expanding portfolio.

Starwood Property Trust (STWD) has priced a significant public offering of 25.5 million shares of common stock, generating approximately $508 million in gross proceeds. Underwriters have a 30-day option to purchase an additional 3.825 million shares, which could increase total proceeds to $584 million.

The primary purpose of this capital raise is to fund the acquisition of Fundamental Income Properties, a transaction STWD recently announced. This strategic move signals STWD's intention to expand its real estate investment portfolio, though specific details about Fundamental Income Properties' assets aren't provided in the release.

For existing shareholders, this offering represents 9.3% dilution to the current outstanding share count of approximately 274 million shares. While dilution is a near-term negative, the acquisition could potentially strengthen STWD's asset base and income generation capabilities if successfully integrated.

The company has included flexibility in its use of proceeds, noting it may deploy capital toward originating commercial mortgage loans or repaying existing debt under its repurchase facilities if the acquisition doesn't close. This indicates prudent contingency planning.

BofA Securities and Wells Fargo Securities are serving as the offering's underwriters, with settlement expected on July 18, 2025. The stock issuance is being conducted under STWD's existing shelf registration statement, suggesting the company had anticipated potential capital needs and prepared accordingly.

MIAMI BEACH, Fla., July 16, 2025 /PRNewswire/ -- Starwood Property Trust, Inc. (NYSE: STWD) (the "Company") today announced the pricing of an underwritten public offering of 25,500,000 shares of its common stock for total estimated gross proceeds of approximately $508 million (or approximately $584 million if the option to purchase additional shares is exercised in full). The underwriters have a 30-day option from the date of the offering to purchase up to an additional 3,825,000 shares from the Company.  Settlement of the offering is subject to customary closing conditions and is expected to occur on July 18, 2025. All of the shares will be issued under the Company's currently effective shelf registration statement filed with the Securities and Exchange Commission.

The Company intends to use the net proceeds received from the offering to fund a portion of the purchase price for the Company's recently announced pending acquisition of Fundamental Income Properties, LLC. The Company may also use a portion of the net proceeds (or all of the net proceeds, in the unlikely event the acquisition does not close) to originate and purchase commercial mortgage loans and other target assets and investments, or for other general corporate purposes, including, but not limited to, the repayment of outstanding indebtedness under the Company's repurchase facilities.

BofA Securities and Wells Fargo Securities are serving as underwriters for the offering.

The offering of these securities may be made only by means of a prospectus and a related prospectus supplement, a copy of which may be obtained by contacting: BofA Securities, NC1-022-02-25, 201 North Tryon Street, Charlotte, North Carolina 28255-0001, Attn: Prospectus Department, email: dg.prospectus_requests@bofa.com; or Wells Fargo Securities, 90 South 7th Street, 5th Floor, Minneapolis, Minnesota 55402, email: wfscustomerservice@wellsfargo.com, telephone: 1-800-645-3751 (option #5).

This press release shall not constitute an offer to sell, or the 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 registration or qualification under the securities laws of any such state or jurisdiction.

About Starwood Property Trust, Inc.

Starwood Property Trust (NYSE: STWD) is a leading diversified finance company with a core focus on the real estate and infrastructure sectors. An affiliate of global private investment firm, Starwood Capital Group, the Company has successfully deployed $108 billion of capital since inception and manages a portfolio of $27.5 billion across debt and equity investments. Starwood Property Trust's investment objective is to generate attractive and stable returns for shareholders, primarily through dividends, by leveraging a premiere global organization to identify and execute on the best risk-adjusted returning investments across its target assets.

Forward-Looking Statements

Statements in this press release which are not historical fact may be deemed forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements with respect to the anticipated settlement of the offering and the use of proceeds. Although the Company believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from the Company's expectations include: (i) factors described in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 and its Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, including those set forth under the captions "Risk Factors", "Business", and "Management's Discussion and Analysis of Financial Condition and Results of Operations"; (ii) satisfaction or waiver of the conditions precedent to the consummation of the contemplated acquisition; (iii) unanticipated difficulties or expenditures relating to, or the failure to realize the benefits of, the contemplated acquisition, including in terms of the contemplated acquisition on our future performance; (iv) the Company's recently announced preliminary unaudited results for the three months ended June 30, 2025 are based upon the Company's estimates, are subject to completion of the Company's quarterly financial closing procedures and have not been reviewed by the Company's independent auditors; such preliminary unaudited results may differ materially from the Company's actual results and may be outside estimated ranges; (v) defaults by borrowers in paying debt service on outstanding indebtedness; (vi) impairment in the value of real estate property securing the Company's loans or in which the Company invests; (vii) availability of mortgage origination and acquisition opportunities acceptable to the Company; (viii) potential mismatches in the timing of asset repayments and the maturity of the associated financing agreements; (ix) national and local economic and business conditions, including as a result of the impact of public health emergencies; (x) the occurrence of certain geo-political events (such as wars, terrorist attacks and tensions between states, including global trade disputes related to tariffs) that affect the normal and peaceful course of international relations; (xi) general and local commercial and residential real estate property conditions; (xii) changes in federal government policies; (xiii) changes in federal, state and local governmental laws and regulations; (xiv) increased competition from entities engaged in mortgage lending and securities investing activities; (xv) changes in interest rates; and (xvi) the availability of, and costs associated with, sources of liquidity.

Contact:

Zachary Tanenbaum
Starwood Property Trust
Phone: 203-422-7788
Email: ztanenbaum@starwood.com

View original content:https://www.prnewswire.com/news-releases/starwood-property-trust-announces-pricing-of-common-stock-offering-302507382.html

SOURCE Starwood Property Trust, Inc.

FAQ

How many shares is Starwood Property Trust (STWD) offering in its July 2025 stock offering?

Starwood Property Trust is offering 25.5 million shares of common stock, with underwriters having an option to purchase an additional 3.825 million shares within 30 days.

How much money will STWD raise from its July 2025 stock offering?

The offering is expected to raise approximately $508 million in gross proceeds, potentially increasing to $584 million if the underwriters exercise their additional shares option in full.

What will Starwood Property Trust use the stock offering proceeds for?

The proceeds will primarily fund the acquisition of Fundamental Income Properties, LLC, with additional uses including originating commercial mortgage loans, purchasing target assets, and general corporate purposes including debt repayment.

When will STWD's July 2025 stock offering close?

The offering is expected to close on July 18, 2025, subject to customary closing conditions.

Who are the underwriters for Starwood Property Trust's 2025 stock offering?

BofA Securities and Wells Fargo Securities are serving as the underwriters for the offering.