Starwood Property Trust is offering USD450m aggregate principal amount of its Convertible Senior Notes due 2018 in an underwritten public offering.
Prior to 1 September 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 underwriters will have a 30-day option from the date of the offering to purchase up to an additional USD67,500,000 aggregate principal amount of notes from the company to cover over-allotments, if any. All of the notes will be issued under the company's currently effective shelf registration statement filed with the Securities and Exchange Commission. The interest rate, conversion rate and other terms of the notes will be determined at the time of pricing of the offering. 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 company intends to use the net proceeds received from the offering to originate and to purchase additional commercial mortgage loans and other target assets and investments. Depending upon the timing of the closing of those transactions, the closing of the company's acquisition of LNR Property, and the company's receipt of funds from asset repayments, sales of assets or other financings, the company may use a portion of the proceeds to fund a portion of the purchase price of LNR. 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.
Deutsche Bank Securities, BofA Merrill Lynch, Citigroup, Credit Suisse and Goldman Sachs will serve as joint book-running managers for the offering.