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

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.

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