GREENWICH, Conn., Oct. 2, 2014 /PRNewswire/ -- Starwood Property Trust, Inc. (NYSE: STWD) (the "Company") today announced the pricing of an underwritten public offering of $375,000,000 aggregate principal amount of its 3.75% Convertible Senior Notes due 2017 (the "Notes"). The underwriters have a 30-day option to purchase up to an additional $56,250,000 aggregate principal amount of the Notes from the Company to cover over-allotments, if any. Settlement of the offering is subject to customary closing conditions and is expected to occur on October 8, 2014. The Notes will be issued under the Company's currently effective shelf registration statement filed with the Securities and Exchange Commission. The Notes will be the Company's senior unsecured obligations and will rank equally with all of its present and future senior unsecured debt and senior to any future subordinated debt.
The Notes will pay interest semiannually at a rate of 3.75% per annum and will mature on October 15, 2017. The Notes will have an initial conversion rate of 41.7397 per $1,000 principal amount of the Notes (equivalent to a conversion price of approximately $23.96 per share of common stock and a conversion premium of approximately 10% based on the closing share price of $21.78 per share of the Company's common stock on October 2, 2014). The initial conversion rate of the Notes is subject to adjustment upon the occurrence of certain events, but will not be adjusted for any accrued and unpaid interest. Prior to April 15, 2017, the Notes will be convertible only upon certain circumstances and during certain periods, and thereafter will be convertible at any time prior to the close of business on the second scheduled trading day prior to maturity. Upon conversion, holders will receive cash, shares of the Company's common stock or a combination thereof at the Company's election.
The Company intends to use the net proceeds received from the offering to originate and purchase additional commercial mortgage loans and other target assets and investments. The Company may also use a portion of the net proceeds for other general corporate purposes, including, but not limited to, the payment of liabilities and other working capital needs.
Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Morgan Stanley & Co. LLC and Wells Fargo Securities, LLC are serving as joint book-running managers 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: Citigroup Global Markets Inc., c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717, Tel: 800-831-9146; Deutsche Bank Securities Inc., 60 Wall Street, New York, New York 10005-2836, Attention: Prospectus Group, by calling (800) 503-4611, or by emailing prospectus.cpdg@db.com; Morgan Stanley & Co. LLC, Attention: Prospectus Department, 180 Varick Street, New York, New York 10014; or Wells Fargo Securities, LLC, 375 Park Avenue, New York, New York 10152, Attention: Equity Syndicate Dept., Telephone: (800) 326-5897, Email: cmclientsupport@wellsfargo.com.
This press release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any state.
About Starwood Property Trust, Inc.
Starwood Property Trust (NYSE: STWD), an affiliate of global private investment firm Starwood Capital Group, is the largest commercial mortgage real estate investment trust in the United States. The Company's core business focuses on originating, acquiring, financing and managing commercial mortgage loans and other commercial real estate debt investments. Through its subsidiaries LNR Property, LLC and Hatfield Philips International, the Company also operates as the largest commercial mortgage special servicer in the United States and one of the largest primary and special servicers in Europe.
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 and Section 21E of the Securities Exchange Act of 1934. 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, 2013, including those set forth under the captions "Risk Factors" and "Business," and in the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2014, including those set forth under the caption "Risk Factors"; (ii) defaults by borrowers in paying debt service on outstanding indebtedness; (iii) impairment in the value of real estate property securing the Company's loans; (iv) availability of mortgage origination and acquisition opportunities acceptable to the Company; (v) the Company's ability to fully integrate LNR Property LLC, which was acquired on April 19, 2013, into its business and achieve the benefits that the Company anticipates from this acquisition; (vi) potential mismatches in the timing of asset repayments and the maturity of the associated financing agreements; (vii) national and local economic and business conditions; (viii) general and local commercial and residential real estate property conditions; (ix) changes in federal government policies; (x) changes in federal, state and local governmental laws and regulations; (xi) increased competition from entities engaged in mortgage lending and securities investing activities; (xii) changes in interest rates; and (xiii) the availability of and costs associated with sources of liquidity.
Contact:
Zachary Tanenbaum
Starwood Property Trust
Phone: 203-422-7788
Email: ztanenbaum@starwood.com
SOURCE Starwood Property Trust, Inc.