Starwood Property Trust Announces Public Offering of Common Stock

Rhea-AI Summary

Starwood Property Trust (NYSE: STWD) has announced a public offering of 17,500,000 shares of its common stock, with an additional 30-day option for underwriters to purchase up to 2,625,000 more shares. The offering will be conducted under the company's current shelf registration statement. Net proceeds will be used to originate and purchase additional commercial mortgage loans and other target assets, as well as for general corporate purposes, including potential repayment of outstanding indebtedness under the company's repurchase facilities. Citigroup, Goldman Sachs & Co. , and Morgan Stanley will serve as joint book-running managers for the offering.

Positive

• Potential to raise significant capital for business expansion
• Funds to be used for originating and purchasing additional commercial mortgage loans
• Opportunity to repay outstanding indebtedness, potentially improving the company's financial position

Negative

• Potential dilution of existing shareholders' ownership
• Increased share count may negatively impact earnings per share

Insights

Financial Analyst

Starwood Property Trust's decision to offer 17.5 million shares of common stock, with an option for an additional 2.625 million, signals a significant capital raise. This move could dilute existing shareholders' ownership but also provides substantial liquidity for the company's growth strategy. The intended use of proceeds for originating and purchasing commercial mortgage loans aligns with their core business model and could potentially boost their loan portfolio and revenue streams.

However, investors should note that this offering might put downward pressure on the stock price in the short term due to dilution. The company's mention of using funds for "repayment of outstanding indebtedness" suggests a potential deleveraging strategy, which could improve the company's financial health but might impact near-term growth prospects. Overall, this offering represents a strategic move to capitalize on market opportunities while managing debt levels.

Market Research Analyst

The timing of Starwood's offering is intriguing, potentially indicating management's perception of favorable market conditions or a pressing need for capital. The involvement of top-tier underwriters like Citigroup, Goldman Sachs and Morgan Stanley lends credibility to the offering and suggests strong institutional interest.

Investors should consider the broader real estate market trends driving this decision. With interest rates potentially stabilizing, Starwood might be positioning itself to capitalize on emerging opportunities in the commercial mortgage space. However, the success of this strategy depends on the company's ability to deploy capital effectively in a competitive market. The offering's reception will be a key indicator of investor confidence in Starwood's growth prospects and management's capital allocation skills.

GREENWICH, Conn., Sept. 3, 2024 /PRNewswire/ -- Starwood Property Trust, Inc. (NYSE: STWD) (the "Company") today announced that, subject to market and other conditions, it is offering 17,500,000 shares of its common stock in an underwritten public offering.  The underwriters will have a 30-day option from the date of the offering to purchase up to an additional 2,625,000 shares from the Company.  All of the shares will be issued under the Company's currently effective shelf registration statement filed with the Securities and Exchange Commission.

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 repayment of outstanding indebtedness under the Company's repurchase facilities.

Citigroup, Goldman Sachs & Co. LLC and Morgan Stanley will serve 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, NY 11717, telephone: (800) 831-9146; Goldman Sachs & Co. LLC, 200 West Street, New York, NY 10282-2198, Attention: Prospectus Department, Telephone: 866-471-2526, Email: Prospectus-ny@ny.email.gs.com; or Morgan Stanley & Co. LLC, 180 Varick Street, 2nd Floor, New York, NY 10014, Attn: Prospectus Department.

This press release shall not constitute an offer to sell, or the solicitation of an offer to buy, these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Starwood Property Trust, Inc.

Starwood Property Trust, Inc. (NYSE: STWD), an affiliate of global private investment firm Starwood Capital Group, is a leading diversified finance company with a core focus on the real estate and infrastructure sectors.  As of June 30, 2024, the Company has successfully deployed over $98 billion of capital since inception and manages a portfolio of $26 billion across debt and equity investments.  Starwood Property Trust's investment objective is to generate attractive and stable returns for shareholders, primarily through dividends, by leveraging a premiere global organization to identify and execute on the best risk adjusted returning investments across its target assets.

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, as amended, including statements with respect to the anticipated offering and the use of proceeds. 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, 2023 and its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2024 and June 30, 2024, including those set forth under the captions "Risk Factors", "Business", and "Management's Discussion and Analysis of Financial Condition and Results of Operations"; (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 or in which the Company invests; (iv) availability of mortgage origination and acquisition opportunities acceptable to the Company; (v) potential mismatches in the timing of asset repayments and the maturity of the associated financing agreements; (vi) the Company's ability to achieve the benefits that it anticipates from the prior acquisition of the project finance origination, underwriting and capital markets business of GE Capital Global Holdings, LLC; (vii) national and local economic and business conditions, including as a result of the impact of public health emergencies; (viii) the occurrence of certain geo-political events (such as wars, terrorist attacks and tensions between states) that affect the normal and peaceful course of international relations; (ix) general and local commercial and residential real estate 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 and securities investing activities; (xiii) changes in interest rates; and (xiv) the availability of, and costs associated with, sources of liquidity.

Contact:

Zachary Tanenbaum
Starwood Property Trust
Phone: 203-422-7788
Email: ztanenbaum@starwood.com

 

View original content:https://www.prnewswire.com/news-releases/starwood-property-trust-announces-public-offering-of-common-stock-302237189.html

SOURCE Starwood Property Trust, Inc.

FAQ

How many shares is Starwood Property Trust (STWD) offering in its public offering?

Starwood Property Trust (STWD) is offering 17,500,000 shares of its common stock, with an additional 30-day option for underwriters to purchase up to 2,625,000 more shares.

What will Starwood Property Trust (STWD) use the proceeds from the stock offering for?

STWD intends to use the net proceeds to originate and purchase additional commercial mortgage loans and other target assets, as well as for general corporate purposes, including potential repayment of outstanding indebtedness under the company's repurchase facilities.

Who are the joint book-running managers for Starwood Property Trust's (STWD) stock offering?

Citigroup, Goldman Sachs & Co. , and Morgan Stanley will serve as joint book-running managers for STWD's stock offering.

When was Starwood Property Trust's (STWD) public offering of common stock announced?

Starwood Property Trust (STWD) announced the public offering of common stock on September 3, 2024.