Starwood Property Trust Prices Offering of Sustainability Convertible Notes

GREENWICH, Conn., June 22, 2023 /PRNewswire/ -- Starwood Property Trust, Inc. (NYSE: STWD) (the "Company") today announced the pricing of an underwritten offering of $350,000,000 aggregate principal amount of its 6.750% Convertible Senior Notes due 2027 (the "Notes"). The underwriters have a 30-day option from the date of the offering to purchase up to an additional $52,500,000 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 July 3, 2023.

The Company intends to allocate an amount equal to the net proceeds from the offering to finance or refinance, in whole or in part, recently completed or future eligible green and/or social projects. Eligible green and/or social projects are projects that meet certain eligibility criteria in alignment with the four core components of the Green Bond Principles 2021 (with June 2022 Appendix 1), Social Bond Principles 2021 (with June 2022 Appendix 1) and Sustainability Bond Guidelines 2021 as administered by the International Capital Market Association.  Net proceeds allocated to previously incurred costs associated with eligible green and/or social projects will be available for the repayment of indebtedness previously incurred. Pending full allocation of an amount equal to the net proceeds to eligible green and/or social projects, the Company intends to use the net proceeds for general corporate purposes, including the repayment of outstanding indebtedness under the Company's repurchase facilities.

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 6.750% per annum and will mature on July 15, 2027. The Notes will have an initial conversion rate of 48.1783 per $1,000 principal amount of the Notes (equivalent to a conversion price of approximately $20.76 per share of common stock and a conversion premium of approximately 12.5% based on the closing share price of $18.45 per share of the Company's common stock on June 22, 2023). The initial conversion rate of the Notes is subject to adjustment upon the occurrence of certain events, but will not be adjusted for any accrued and unpaid interest. Prior to January 15, 2027, 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 of the Notes. Upon conversion, holders will receive cash, shares of the Company's common stock or a combination thereof at the Company's election.

Goldman, Sachs & Co. LLC, J.P. Morgan Securities LLC, Wells Fargo Securities, LLC,  Barclays Capital Inc., BofA Securities, Citigroup Global Markets Inc. and Morgan Stanley & Co. LLC are serving as the 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: Goldman, Sachs & Co. LLC toll-free at (866) 471-2526 or emailing prospectus-ny@ny.email.gs.com; J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717 Telephone 866-803-9204; Wells Fargo Securities, Attention: Equity Syndicate Department, 500 West 33^rd St. 14^th Floor, New York, NY 10001 or (800) 326-5897 or email a request to cmclientsupport@wellsfargo.com; Barclays Capital Inc., c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, telephone: 888-603-5847, email: Barclaysprospectus@broadridge.com; BofA Securities, Attention: Prospectus Department, NC1-022-02-25, 201 North Tryon Street, Charlotte, NC 28255-0001, or by emailing dg.prospectus_requests@bofa.com; Citigroup Global Markets Inc., c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, telephone: (800) 831-9146; or Morgan Stanley & Co. LLC, Attention: Prospectus Department, 180 Varick Street, 2nd Floor, New York, NY 10014 or by phone: 1-866-718-1649.  

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 (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 March 31, 2023, the Company has successfully deployed over $94 billion of capital since inception and manages a portfolio of over $28 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, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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, 2022, and the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, including those set forth under the captions "Risk Factors", "Business" and "Management's Discussion and Analysis of Financial Condition and Results of Operation"; (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) the duration and extent of the ongoing effects of the COVID-19 pandemic, including variants and resurgences, or any future pandemic or similar outbreak, on the global economy, the Company's operations and financial performance and the operations and financial performance of the borrowers underlying the Company's real estate-related assets and infrastructure loans and tenants of the Company's owned properties; (viii) national and local economic and business conditions, including as a result of the ongoing impact of the COVID-19 pandemic; (ix) 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 (such as the war between Russia and Ukraine); (x); general and local commercial and residential real estate property conditions; (xi) changes in federal government policies; (xii) changes in federal, state and local governmental laws and regulations; (xiii) increased competition from entities engaged in mortgage lending and securities investing activities; (xiv) changes in interest rates; and (xv) the availability of, and costs associated with, sources of liquidity.

Contact:

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

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SOURCE Starwood Property Trust, Inc.