Redwood Trust sets $0.18 Q3 dividend, plans $150M notes
Redwood Trust, Inc. (RWT) declared third quarter 2026 dividends and announced balance-sheet actions including a planned convertible notes offering and sales of legacy loans.
Filing Impact
(Very High)
Filing Sentiment
(Neutral)
Form Type
8-K
Rhea-AI Filing Summary
Redwood Trust, Inc. (RWT) declared third quarter 2026 dividends and announced balance-sheet actions including a planned convertible notes offering and sales of legacy loans. The Board declared a $0.18 per share common stock dividend, unchanged from the prior quarter and representing the 109th consecutive quarterly common dividend, payable September 30, 2026 to holders of record on September 23, 2026. The Board also declared a third quarter 2026 dividend on the 10.00% Series A preferred stock of $0.625 per share, payable October 15, 2026 to holders of record on October 1, 2026.
Redwood reached preliminary agreements to dispose of certain legacy bridge loans with an aggregate unpaid principal balance of up to $190 million, which management currently estimates would reduce book value per share by approximately 2% from the June 30, 2026 level. These dispositions are targeted to close late in the third quarter or early in the fourth quarter of 2026 and remain subject to definitive documentation and closing conditions. Separately, Redwood plans a private offering of $150 million aggregate principal amount of convertible senior notes due 2030, with an option for initial purchasers to buy up to an additional $22.5 million of notes. The company intends to use a portion of the net proceeds to repurchase part of its 2027 notes, up to $20 million to repurchase common stock, and the remainder for general corporate purposes and funding its housing credit platforms.
Positive
- $0.18 Q3 2026 common dividend is maintained, marking Redwood’s 109th consecutive quarterly common dividend and signaling ongoing commitment to shareholder payouts.
- Planned $150 million convertible notes due 2030 with part of the proceeds earmarked to repurchase existing 2027 Notes indicates proactive liability management.
- Intention to use up to $20 million of net proceeds to repurchase common stock could support shareholder value if executed.
Negative
- Planned sale of legacy bridge loans with up to $190 million unpaid principal balance is expected to reduce book value per share by approximately 2% from June 30, 2026.
- Issuance of $150 million in senior unsecured convertible notes due 2030, plus a $22.5 million upsize option, increases debt and introduces potential future equity dilution upon conversion.
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