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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR
15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event
reported): August 22, 2025
REDWOOD TRUST, INC.
(Exact name of registrant as specified in
its charter)
|
Maryland
(State or other
jurisdiction
of incorporation)
|
001-13759
(Commission
File
Number)
|
68-0329422
(I.R.S. Employer
Identification No.) |
One
Belvedere Place
Suite 300
Mill Valley, California
94941
(Address of principal executive offices and Zip Code)
(415) 389-7373
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions (see General Instruction A.2. below):
| ¨ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging
growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging growth
company ¨
If an emerging growth company,
indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Securities registered pursuant to Section
12(b) of the Act:
| Title of each class |
Trading symbol(s) |
Name
of each exchange on which registered |
| Common Stock, par value $0.01 per share |
RWT |
New York Stock Exchange |
|
10% Series A Fixed-Rate Reset Cumulative Redeemable Preferred Stock, par value $0.01 per share |
RWT PRA |
New York Stock Exchange |
| 9.125% Senior Notes Due 2029 |
RWTN |
New York Stock Exchange |
| 9.0% Senior Notes Due 2029 |
RWTO |
New York Stock Exchange |
| 9.125% Senior Notes Due 2030 |
RWTP |
New York Stock Exchange |
| Item 2.03. | Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant. |
On August 25, 2025, Redwood
Trust, Inc. (the “Company”) issued $50,000,000 aggregate principal amount of the Company’s 7.75% Convertible Senior
Notes due 2027 (the “Notes”) pursuant to securities purchase agreements (the “Securities Purchase Agreements”)
with the respective investors named therein (the “Offering”). As used herein, the term “Notes” includes the Existing
Notes (as defined below), unless the context requires otherwise.
The Notes issued in the Offering
were issued as a reopening of, and are part of the same series as, the 7.75% convertible senior notes due 2027 that the Company originally
issued in June 2022 (the “Initial Notes”) and the 7.75% convertible senior notes due 2027 that the Company issued in
October 2024 (the “Initial Additional Notes” and, together with the Initial Notes, the “Existing Notes”).
Upon completion of the Offering, the aggregate principal amount of outstanding Notes was $297,170,000.
The Company issued the Notes
under an indenture dated as of June 9, 2022 (the “Indenture”) between the Company and Wilmington Trust, National Association,
a national banking association, as trustee (the “Trustee”).
The Notes bear interest at
a rate of 7.75% per year, payable semi-annually in arrears on June 15 and December 15 of each year, beginning (in the case of
Notes issued in the Offering) on December 15, 2025. The Notes are the general 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 of the Company 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 June 15,
2027 (the “Maturity Date”), unless earlier redeemed or repurchased by the Company or converted.
Before March 15, 2027,
holders will have the right to convert their Notes only upon the occurrence of certain events. From and after March 15, 2027, holders
may convert their Notes at any time at their election until the close of business on the second scheduled trading day immediately before
the maturity date. The Company will have the right to elect to settle conversions either entirely in cash or in a combination of cash
and shares of its common stock, $0.01 par value per share (the “Common Stock”). However, upon conversion of any Notes, the
conversion value, which will be determined over an “Observation Period” (as defined in the Indenture) consisting of 25 trading
days, will be paid in cash up to at least the principal amount of the Notes being converted. The conversion rate of the Notes is 95.6823
shares of Common Stock per $1,000 principal amount of Notes, which is equivalent to a conversion price of approximately $10.45 per share.
The conversion price represents a premium of approximately 78.0% over the closing price of the Company’s Common Stock on August 21.
2025. The conversion rate is subject to adjustment in certain circumstances.
Upon the occurrence of a fundamental
change (as defined in the Indenture) involving the Company, holders of the Notes may require the Company to repurchase all or a portion
of their Notes for cash at a price equal to 100% of the principal amount of the Notes to be purchased, plus accrued and unpaid interest
to, but excluding, the fundamental change repurchase date.
The Company will have the
right to redeem the Notes, in whole or in part, at its option at any time, and from time to time, prior to maturity, to the extent, and
only to the extent, necessary to preserve its status as a real estate investment trust (“REIT”) for U.S. federal income tax
purposes. In addition, subject to the partial redemption limitation described below, the Company will have the right to redeem the Notes,
in whole or in part, at its option on or after June 16, 2025, but only if the last reported sale price per share of the Company’s
Common Stock exceeds 130% of the conversion price for a specified period of time. A redemption pursuant to the provision described in
the preceding sentence is referred to as a “Provisional Redemption.” Pursuant to the partial redemption limitation, the Company
may not elect to redeem less than all of the outstanding Notes pursuant to a Provisional Redemption unless at least $100.0 million aggregate
principal amount of Notes are outstanding and not subject to Provisional Redemption as of the time the Company sends the related redemption
notice. The redemption price for any Note called for redemption will be a cash amount equal to the principal amount of the Notes to be
redeemed, plus accrued and unpaid interest, if any. The Company may at any time and from time to time repurchase Notes by tender offer,
open market purchases, negotiated transactions or otherwise, in accordance with applicable securities laws.
If an event of default (as
defined in the Indenture) occurs and is continuing, the Trustee by notice to the Company, or the holders of at least 25% in aggregate
principal amount of the Notes then outstanding by notice to the Company and the Trustee, may, and the Trustee at the request of such holders
shall, declare 100% of the principal of and accrued and unpaid interest on all the Notes to be due and payable. In the case of an event
of default arising out of certain bankruptcy or insolvency events (as set forth in the Indenture), 100% of the principal of and accrued
and unpaid interest on the Notes will automatically become due and payable.
The above description of the
Indenture and the Notes is a summary and is not complete. Copies of the Indenture and the form of the certificate representing the Notes,
the terms of which are incorporated by reference, are attached as exhibits 4.1 and 4.2, respectively, to the Company’s Current Report
on Form 8-K, filed on June 9, 2022, and the above summary is qualified in its entirety by reference to the terms of the Indenture
and the Notes set forth in such exhibits.
| Item 9.01. |
Financial Statements and Exhibits. |
Exhibits
|
Exhibit Number |
|
Description |
| 5.1 |
|
Opinion of Latham & Watkins LLP |
| 5.2 |
|
Opinion of Venable LLP |
| 23.1 |
|
Consent of Latham & Watkins LLP (included in Exhibit 5.1) |
| 23.2 |
|
Consent of Venable LLP (included in Exhibit 5.2) |
| 104 |
|
Cover page interactive data file (embedded within the inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Date: August 25, 2025 |
REDWOOD
TRUST, INC. |
| |
By: |
/S/ Brooke E. Carillo |
|
| Name: | Brooke E. Carillo |
|
| Title: | Chief Financial Officer |
