SEC Filing Summary: Redwood Trust, Inc. (Form 8-K)
Business Context and Reporting Period
Company: Redwood Trust, Inc.
Filing Date: May 23, 2007
Reporting Period: Event date of May 23, 2007
Context: The Company, a Maryland corporation, entered into a material definitive agreement to issue subordinated debt to fund general corporate purposes and asset acquisitions.
Key Financial Metrics
This filing reports a specific debt issuance event rather than periodic financial performance. Key metrics related to the transaction include:
- Debt Issuance: $50,000,000 aggregate principal amount of Subordinated Notes due 2037.
- Interest Rate: Variable rate equal to LIBOR plus 2.25%.
- Interest Payment Schedule: Quarterly (January 30, April 30, July 30, October 30), commencing July 30, 2007.
- Maturity Date: July 30, 2037.
- Redemption: Callable in whole or in part at par on or after July 30, 2012.
- Revenue, Profit, Cash Flow, Margins, Liquidity: The filing text does not provide a clear value for these operational metrics.
Material Changes Versus Prior Period
The filing does not provide comparative financial data against a prior period. The material change is the increase in long-term debt obligations by $50,000,000 and the associated future interest expense.
Guidance, Outlook, Risks, and Contingencies
Use of Proceeds: General corporate purposes, including asset acquisitions consistent with the Company's investment strategy.
Risks and Contingencies:
- Event of Default: Upon occurrence, the Trustee or holders of at least 25% of the Notes may declare the principal and accrued interest immediately due and payable.
- Change of Control: If a Change of Control results in a downgrade of the Company's corporate credit rating by two of S&P, Moody's, or Fitch, Note holders have the right to require the Company to purchase the Notes at 100% of principal plus accrued interest.
- Counterparty: Notes were purchased by Obsidian CDO Warehouse, LLC.
Key Facts for Investor Verification
- Verify the current LIBOR rate to calculate the effective interest cost of the new $50 million debt.
- Confirm the Company's current corporate credit rating to assess the risk of triggering the Change of Control put option.
- Review the Company's liquidity position to ensure it can meet quarterly interest payments starting July 30, 2007.
- Examine the specific asset acquisition strategy mentioned to understand the intended deployment of the $50 million proceeds.