GREENWICH, Conn., Feb. 12, 2013 /PRNewswire/ -- Starwood Property Trust, Inc. (NYSE: STWD) (the "Company") today announced the pricing of an underwritten public offering of $525,000,000 aggregate principal amount of its 4.55% Convertible Senior Notes due 2018 (the "Notes") for total gross proceeds of $525 million. The underwriters have a 30-day option to purchase up to an additional $75,000,000 aggregate principal amount of 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 February 15, 2013. All of 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 4.55% per annum and will mature on March 1, 2018. The Notes will have an initial conversion rate of 35.5391 per $1,000 principal amount of the Notes (equivalent to a conversion price of approximately $28.138 per share of common stock and a conversion premium of approximately 10% based on the closing share price of $25.58 per share of the Company's common stock on February 11, 2013). The initial conversion rate is subject to adjustment upon the occurrence of certain events, but will not be adjusted for any accrued and unpaid interest. Prior to September 1, 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 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 LLC ("LNR"), and the Company's receipt of funds from asset repayments, sales of assets or other financings, the Company may utilize 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 & Co. 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: Deutsche Bank Securities Inc., Attention: Prospectus Group, 60 Wall Street, New York, New York 10005-2836, by calling (800) 503-4611, or by emailing email@example.com; BofA Merrill Lynch, 222 Broadway, New York, New York 10038, Attention: Prospectus Department or e-mail firstname.lastname@example.org; Citigroup, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717, Tel: 800-831-9146 or e-mail email@example.com; Credit Suisse Securities (USA) LLC, Attention: Prospectus Department, One Madison Avenue, New York, New York 10010, Telephone: (800) 221-1037, Email: firstname.lastname@example.org; or Goldman, Sachs & Co., Prospectus Department, 200 West Street, New York, NY 10282, telephone: (866) 471-2526, facsimile: (212) 902-9316, e-mail: email@example.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, Inc. focuses primarily on originating, investing in, financing and managing commercial mortgage loans and other commercial and residential real estate-related debt investments. Starwood Property Trust, Inc. is externally managed and advised by SPT Management, LLC, an affiliate of Starwood Capital Group, and has elected to be taxed as a real estate investment trust for U.S. federal income tax purposes.
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, 2011, including those set forth under the caption "Business," in the Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 2012, June 30, 2012 and September 30, 2012, including those set forth under the caption "Risk Factors" in the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, and in the Company's other periodic reports filed with the Securities and Exchange Commission; (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 complete the pending acquisition of LNR and the performance of LNR subsequent to the acquisition; (vi) the Company's ability to integrate LNR into its business and achieve the benefits that the Company anticipates from the acquisition of LNR; (vii) potential mismatches in the timing of asset repayments and the maturity of the associated financing agreements; (viii) national and local economic and business conditions; (ix) general and local commercial real estate and residential property conditions; (x) changes in federal government policies; (xi) changes in federal, state and local governmental laws and regulations; (xii) increased competition from entities engaged in mortgage lending; (xiii) changes in interest rates; (xiv) changes in the exchange rates between the U.S. dollar and the respective currencies for the Company's non-dollar denominated investments; and (xv) the availability of and costs associated with sources of liquidity.
Contact: Investor Relations
SOURCE Starwood Property Trust, Inc.