Once again mortgage REIT Redwood Trust (RWT) is coming to market with a new issuance of baby bonds. This will be the 3rd issuance by this company in 1 year. Previous issues were sold on 1/17/2024 and 6/13/2024 with 9.125% and 9% respectively. The company also has a 10% fixed rate reset preferred outstanding (RWT-A).
I have not reviewed the company financials lately, but on the surface they are certainly racking up a lot of high yield debt.
The preliminary prospectus can be read here.
Thanks to J for posting this in Reader alerts just a bit ago. EarlyBird chimed in with some added detail.
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While I am known to dabble in the gutter I just cannot get excited to rush out and buy this type of material. I have passed on so many news issues lately.
RWTN has the same 9.125% coupon and trades for $25.37. How much of that
37 cents is interest earned but not yet paid? Do you calculate from the last ex date or the last pay date?
Another one that yields 9%! I continue to be amazed how the use of leverage and securization allows a company to make money borrowing at 9% while dealing with mortgages yielding 7%. Leverage is a very sharp double edged sword that will cut sharply when the mortgage business turns down due to foreclosures etc. That hasn’t stopped me from dabbling in a couple of these though….. I’ve resisted my greed in loading up too much on them and I keep a close rein on them. The slightest hint of trouble and I’m gone …..
DJ think of the area RWT is in. Similar to Pacific Plasaides. High end housing on steep hillsides and narrow roads.
Hollywood of the North
RWT PR today FYI – In response to the Los Angeles wildfires, we continue to assess the impact to our business and we are currently monitoring the affected areas. While the fires are ongoing and the full extent of their total impact is yet to be determined, based on our assessments to date, we have not identified circumstances that we believe would have a material adverse impact on our business.
Charles M…… I guess in a possible wildfire or mudslide zone qualifies under my etc! Am not familiar with Redwood Trust, but should have guessed with the name Redwood……. Something not really mentioned in the news I’ve seen on the fires yet. After the fires and the rains come another disaster will be the mudslides. Another left from incineration from the fires get destroyed by mudslides possibly. I’m spending the week with my almost 106 year old Dad in his coastal NC cottage. Today we rode over to a major Coast Guard Air Station Dad wanted to see. Amazingly we were allowed entry because of his WWII veteran status. It was pretty cool watching the C130 Hercules planes taking off and landing. It was an impressive facility.
Dj Often times driving to Sacramento on I80 past Travis AB you will see them landing or taking off. Impressive is the word I would use.
I used to have to drive a delivery truck for job sites in Mill Valley. One time I had to back downhill and around a switchback. The contractor told me to be careful. Last driver went over the side of the hill. No way are fire trucks going to get into a lot of the areas around Mt Tamalpias. You pay for the views. Google it.
Back in the days before 911 I took my two young kids to the annual open house at what is now Fort Liberty of the 82nd Airborne. Bit qas right after the Panama Invasion. They reenacted the taking of an air field complete with s low altitude drop of hundreds of paratroopers, Apache helicopters stationary at the airfield corners, and the C130s then landing and unloading heavy equipment for the airborne. It was a show watching the C130s after unloading back, turn themselves around , and do a short runway takeoff. To get to the stands to watch all this the entry was through a huge C5A Galaxy cargo plane. What a day……. This isn’t now like it was then I think.