Redwood Trust, Inc. Announces Pricing of 4.625% Convertible Senior Notes Due 2018

 Redwood Trust, Inc. Announces Pricing of 4.625% Convertible Senior Notes Due
                                     2018

PR Newswire

MILL VALLEY, Calif., Feb. 28, 2013

MILL VALLEY, Calif., Feb. 28, 2013 /PRNewswire/ -- Redwood Trust, Inc.
("Redwood") (NYSE: RWT)today announced that it priced $250.0 million
aggregate principal amount of its 4.625% convertible senior notes due 2018
(the "Notes") in an underwritten public offering. Redwood granted the
underwriters a 30-day option to purchase up to an additional $37.5 million
aggregate principal amount of the Notes in connection with the offering, to
the extent the underwriters sell more than $250.0 million aggregate principal
amount of the Notes. The Notes will be senior unsecured obligations of
Redwood. The offering is expected to close on March 6, 2013, subject to the
satisfaction of certain closing conditions.

Interest on the Notes will be payable semiannually on April 15 and October 15,
beginning on October 15, 2013; the Notes will mature on April 15, 2018. Upon
conversion, holders of the Notes will receive shares of Redwood's common
stock. If Redwood undergoes a "fundamental change" (as defined in the
prospectus supplement relating to the Notes), subject to certain conditions,
holders of the Notes may require Redwood to repurchase for cash all or part of
such holders Notes at 100% of the principal amount of the Notes to be
repurchased, plus accrued and unpaid interest, if any, up to, but excluding,
the repurchase date. 

Holders may convert any of their Notes into shares of Redwood's common stock
at the applicable conversion rate at any time prior to the close of business
on the second scheduled trading day prior to the maturity date, unless the
Notes have been previously repurchased by Redwood. Any conversions of Notes
into shares of Redwood common stock will be subject to certain ownership
limitations (as more fully described in the prospectus supplement relating to
the Notes). The initial conversion rate for each $1,000 aggregate principal
amount of the Notes is 41.1320 shares of common stock, equivalent to a
conversion price of approximately $24.31 per share, which is a 20.0% premium
to the closing price of Redwood's common stock on February 28, 2013.

Redwood will not be permitted to redeem the Notes at its option. Redwood may
at any time and from time to time repurchase Notes by tender offer, open
market purchases, negotiated transactions or otherwise, in accordance with
applicable securities laws.

Redwood intends to use the net proceeds from this offering to fund its
business and investment activity, which may include funding purchases of
residential mortgage loans, funding the origination of commercial loans and
acquiring mortgage-backed securities for its investment portfolio, as well as
for other general corporate purposes.

J.P. Morgan Securities LLC and Barclays Capital Inc.are acting as joint
book-running managers for the offering. Goldman, Sachs & Co. and JMP
Securities LLC are acting as co-lead managers. A copy of the prospectus
supplement and prospectus relating to these securities may be obtained, when
available, by contacting: J.P. Morgan Securities LLC c/o Broadridge Financial
Solutions, 1155 Long Island Avenue, Edgewood, New York 11717 or by calling
1-866-803-9204; or Barclays Capital Inc. c/o Broadridge Financial Solutions,
1155 Long Island Avenue, Edgewood, New York 11717 or by calling 888-603-5847.

This announcement 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
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. This announcement is being issued pursuant to and in
accordance with Rule 134 under the Securities Act of 1933, as amended. The
offering was made only by means of a prospectus supplement and the
accompanying prospectus, forming a part of the effective registration
statement.

Redwood Trust, Inc. (NYSE:RWT) is a publicly traded company structured as a
real estate investment trust.

CAUTIONARY STATEMENT: This press release contains forward-looking statements
within the meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, such as statements related to the offering and
the expected use of the net proceeds. Forward-looking statements involve
numerous risks and uncertainties. Redwood's actual results may differ
materially from those projected, and Redwood cautions investors not to place
undue reliance on the forward-looking statements contained in this release.
Forward-looking statements are not historical in nature and can be identified
by words such as "anticipate," "estimate," "will," "should," "expect,"
"believe," "intend," "seek," "plan," and similar expressions or their negative
forms, or by references to strategy, plans, or intentions. No assurance can
be given that the offering will be completed on the terms described, or at
all, or that the net proceeds of the offering will be used as indicated.
Completion of the offering on the terms described, and the application of net
proceeds, are subject to numerous conditions, risks, and uncertainties, many
of which are beyond the control of Redwood, including, among other things,
those described in Redwood's preliminary prospectus supplement dated February
28, 2013, the accompanying prospectus dated August 6, 2010, and the documents
incorporated in the prospectus supplement and the prospectus by reference.
Redwood undertakes no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events, or
otherwise.

SOURCE Redwood Trust, Inc.

Contact: Mike McMahon, Managing Director, +1-415-384-3805
 
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