REDWOOD TRUST INCRWT
REDWOOD TRUST INC Debt Disclosure
Debt Obligations, Net
We enter into loan warehouse facilities, repurchase agreements ("repo"), recourse subordinate securities financings, and other forms of collateralized (and generally uncommitted) borrowings with several banks and major investment banking firms. We use debt to finance the acquisition and/or origination of residential consumer and residential investor mortgage loans (including those we acquire or originate in anticipation of sale or securitization), and to finance investments in securities and other investments. Additionally, we use corporate debt obligations to fund other aspects of our business and operations, including the repurchase of shares of our capital stock.
At December 31, 2024, we had outstanding agreements on debt obligations with several counterparties and we were in compliance with all of the related covenants.
The following tables summarize our debt obligations at December 31, 2024 and 2023.
Table 17.1 – Debt Obligations, Net
| December 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in Thousands) | Number of Facilities or Issuances | Principal Amount | Carrying Value(4) | Facility Capacity | Weighted Average Interest Rate(1) | Final Stated Maturity | Carrying Value of Collateral | |||||||||||||||||||||||||||||||||||||
| Short-Term Facilities: | ||||||||||||||||||||||||||||||||||||||||||||
| Residential consumer loan warehouse facilities | 7 | $ | 956,010 | $ | 956,010 | $ | 2,175,000 | 6.24 | % | 3/2025-10/2025 | $ | 1,005,926 | ||||||||||||||||||||||||||||||||
| Residential investor loan warehouse facilities | 2 | 223,975 | 223,876 | 800,000 | 7.31 | % | 6/2025-7/2025 | 300,843 | ||||||||||||||||||||||||||||||||||||
| Real estate securities repurchase facilities | 6 | 210,352 | 210,352 | — | 5.81 | % | 1/2025-3/2025 | 281,997 | ||||||||||||||||||||||||||||||||||||
| Residential MSR warehouse facility | 1 | 58,164 | 58,164 | 75,000 | 7.65 | % | 10/2025 | 91,506 | ||||||||||||||||||||||||||||||||||||
| HEI warehouse facility | 1 | 97,497 | 97,497 | 150,000 | 9.00 | % | 12/2025 | 207,097 | ||||||||||||||||||||||||||||||||||||
| Recourse Subordinate Securities Financing: | ||||||||||||||||||||||||||||||||||||||||||||
CAFL securities (3) | 1 | 268,240 | 267,140 | N/A | 7.54 | % | 9/2028 | 318,106 | ||||||||||||||||||||||||||||||||||||
| Long-Term Facilities: | ||||||||||||||||||||||||||||||||||||||||||||
Residential investor loan warehouse facilities | 5 | 615,036 | 613,129 | 1,530,000 | 7.83 | % | 5/2026-4/2027 | 889,901 | ||||||||||||||||||||||||||||||||||||
| Servicer advance financing | 1 | 159,798 | 159,031 | 200,000 | 6.32 | % | 12/2026 | 233,820 | ||||||||||||||||||||||||||||||||||||
| Corporate Debt: | ||||||||||||||||||||||||||||||||||||||||||||
Promissory notes (2) (3) | 3 | 12,859 | 12,859 | — | 7.06 | % | N/A | — | ||||||||||||||||||||||||||||||||||||
| Corporate Secured Revolving Financing Facility | 1 | 225,000 | 220,234 | 250,000 | 9.50 | % | 3/2026 | 372,396 | ||||||||||||||||||||||||||||||||||||
5.75% exchangeable senior notes (3) | 1 | 123,574 | 123,087 | N/A | 5.75 | % | 10/2025 | N/A | ||||||||||||||||||||||||||||||||||||
7.75% convertible senior notes (3) | 1 | 247,170 | 242,652 | N/A | 7.75 | % | 6/2027 | N/A | ||||||||||||||||||||||||||||||||||||
| Trust preferred securities and subordinated notes | 2 | 139,500 | 138,860 | N/A | 7.10 | % | 1/2037, 7/2037 | N/A | ||||||||||||||||||||||||||||||||||||
9.125% Senior Notes (3) | 1 | 60,000 | 57,877 | N/A | 9.13 | % | 3/2029 | N/A | ||||||||||||||||||||||||||||||||||||
9.0% Senior Notes (3) | 1 | 85,000 | 82,112 | N/A | 9.00 | % | 9/2029 | N/A | ||||||||||||||||||||||||||||||||||||
| Total Debt Obligations | $ | 3,482,175 | $ | 3,462,880 | $ | 3,701,592 | ||||||||||||||||||||||||||||||||||||||
| December 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in Thousands) | Number of Facilities or Issuances | Principal Amount | Carrying Value(4) | Facility Capacity | Weighted Average Interest Rate(1) | Final Stated Maturity | Carrying Value of Collateral | |||||||||||||||||||||||||||||||||||||
| Short-Term Facilities: | ||||||||||||||||||||||||||||||||||||||||||||
| Residential consumer loan warehouse facilities | 4 | $ | 796,537 | $ | 796,537 | $ | 1,150,000 | 7.27 | % | 2/2024-12/2024 | $ | 907,742 | ||||||||||||||||||||||||||||||||
| Residential investor loan warehouse facilities | 2 | 71,851 | 71,719 | 455,000 | 8.14 | % | 5/2024-6/2024 | 95,225 | ||||||||||||||||||||||||||||||||||||
| Real estate securities repurchase facilities | 3 | 82,622 | 82,622 | — | 7.01 | % | 1/2024-3/2024 | 122,110 | ||||||||||||||||||||||||||||||||||||
| Residential MSR warehouse facility | 1 | 47,858 | 47,858 | 50,000 | 8.60 | % | 10/2024 | 76,560 | ||||||||||||||||||||||||||||||||||||
| HEI warehouse facility | 1 | 122,659 | 122,659 | 150,000 | 9.89 | % | 8/2024 | 237,973 | ||||||||||||||||||||||||||||||||||||
| Servicer advance financing | 1 | 154,369 | 153,653 | 240,000 | 7.71 | % | 12/2024 | 225,345 | ||||||||||||||||||||||||||||||||||||
| Recourse Subordinate Securities Financings: | ||||||||||||||||||||||||||||||||||||||||||||
Sequoia securities (3) | 1 | 124,552 | 124,552 | N/A | 7.21 | % | 9/2024 | 175,096 | ||||||||||||||||||||||||||||||||||||
CAFL securities 1 (3) | 1 | 101,228 | 101,228 | N/A | 5.71 | % | 2/2025 | 124,793 | ||||||||||||||||||||||||||||||||||||
CAFL securities 2 (3) | 1 | 57,982 | 57,982 | N/A | 4.75 | % | 6/2026 | 112,813 | ||||||||||||||||||||||||||||||||||||
| Long Term Facilities: | ||||||||||||||||||||||||||||||||||||||||||||
| Residential investor loan warehouse facilities | 6 | 1,023,384 | 1,021,708 | 2,350,000 | 8.14 | % | 3/2025-12/2026 | 1,327,907 | ||||||||||||||||||||||||||||||||||||
| Corporate Debt: | ||||||||||||||||||||||||||||||||||||||||||||
Promissory notes (2) (3) | 3 | 16,063 | 16,064 | N/A | 6.97 | % | N/A | — | ||||||||||||||||||||||||||||||||||||
5.625% convertible senior notes (3) | 1 | 142,977 | 142,558 | N/A | 5.63 | % | 7/2024 | N/A | ||||||||||||||||||||||||||||||||||||
5.75% exchangeable senior notes (3) | 1 | 156,666 | 155,138 | N/A | 5.75 | % | 10/2025 | N/A | ||||||||||||||||||||||||||||||||||||
7.75% convertible senior notes (3) | 1 | 210,910 | 206,032 | N/A | 7.75 | % | 6/2027 | N/A | ||||||||||||||||||||||||||||||||||||
| Trust preferred securities and subordinated notes | 2 | 139,500 | 138,813 | N/A | 7.90 | % | 1/2037, 7/2037 | N/A | ||||||||||||||||||||||||||||||||||||
| Total Debt Obligations | $ | 3,249,158 | $ | 3,239,123 | $ | 3,405,564 | ||||||||||||||||||||||||||||||||||||||
(1)Variable rate borrowings are primarily based on 1- or 3-month SOFR, plus an applicable spread.
(2)Promissory notes payable on demand to lender with 90-day notice.
(3)Borrowing has a fixed interest rate at period end.
(4)Carrying value presented net of total deferred issuance costs of $20 million and $11 million at December 31, 2024 and 2023, respectively.
In September 2024, we terminated two recourse subordinate financing facilities entered into in 2020 and 2021, and entered into a new recourse subordinate financing facility providing non-marginable debt financing of certain securities retained from our consolidated CAFL securitizations. This financing is fully and unconditionally guaranteed by Redwood, with an interest rate of approximately 7.54% through September 2027, increasing to 10.54% from October 2027 through September 2028. This financing facility may be terminated at our option, beginning in September 2026, and has a final stated maturity in September 2028.
During the year ended December 31, 2024, we repaid our Sequoia recourse subordinate securities financing in full.
Corporate Debt
Corporate Secured Revolving Financing Facility
In March 2024, we entered into a corporate secured revolving financing facility to provide non-marginable recourse debt financing secured by previously unencumbered assets, such as retained Residential Consumer and Residential Investor subordinate securities and other investments, as well as equity in certain operating subsidiaries. This facility has a capacity of $250 million and a
two-year term, with a one-year extension option.
Senior Notes
In January 2024, Redwood issued $60 million of 9.125% Senior Notes due in 2029. The Senior Notes are senior unsecured obligations of Redwood and bear interest at a rate equal to 9.125% per year, payable quarterly in arrears on March 1, June 1, September 1 and December 1 of each year, beginning on June 1, 2024. The Senior Notes mature on March 1, 2029. We may redeem the Senior Notes, in whole or in part, at any time on or after March 1, 2026 at a redemption price equal to 100% of the principal amount redeemed plus accrued and unpaid interest.
In June 2024, Redwood issued $85 million of 9.0% Senior Notes due in 2029. The Senior Notes are senior unsecured obligations of Redwood and bear interest at a rate equal to 9.0% per year, payable quarterly in arrears on March 1, June 1, September 1 and December 1 of each year, beginning on September 1, 2024. The Senior Notes mature on September 1, 2029. We may redeem the Senior Notes, in whole or in part, at any time on or after September 1, 2026 at a redemption price equal to 100% of the principal amount redeemed plus accrued and unpaid interest.
Convertible Notes
RWT Holdings, Inc., a wholly-owned subsidiary of Redwood Trust, Inc., issued $201 million principal amount of 5.75% exchangeable senior notes due 2025. During 2024, 2023 and 2022, we repurchased $33 million, $5 million, and $10 million par value of these notes, respectively. At December 31, 2024, these notes were exchangeable at the option of the holder at an exchange rate of 55.2644 common shares per $1,000 principal amount of exchangeable senior notes (equivalent to an exchange price of $18.09 per common share). Additionally, during the year ended December 31, 2024, we repurchased and repaid in full $143 million principal amount of 5.625% convertible senior notes.
In June 2022, we issued $215 million principal amount of 7.75% convertible senior notes due 2027. These notes require semi-annual interest payments at a fixed annual coupon rate of 7.75% until maturity or conversion, which will be no later than June 15, 2027. After deducting the underwriting discount and offering costs, we received $208 million of net proceeds. In October 2024, we issued an additional $40 million of these 7.75% senior notes due in 2027 in a private offering, resulting in net proceeds of approximately $39 million. We may elect to settle conversions either entirely in cash or in a combination of cash and shares of common stock. Upon conversion, the conversion value will be paid in cash up to at least the principal amount of the notes being converted. At December 31, 2024, the conversion rate of the notes was 95.6823 common shares per $1,000 principal amount of notes (equivalent to a conversion price of $10.45 per common share). During 2024 and 2023, we repurchased $4 million and $4 million par value of these notes, respectively.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2024 | Mar 3, 2025 | Showing above |
| 2023 | Feb 29, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Mar 2, 2020 | |
| 2018 | Mar 1, 2019 | |
| 2017 | Feb 28, 2018 | |
| 2016 | Feb 24, 2017 | |
| 2015 | Feb 26, 2016 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.