RAIT Financial Trust (“RAIT”) (NYSE: RAS) today announced that it has commenced a public offering of Convertible Senior Notes due 2033 (the “Notes”). RAIT expects to grant the underwriters a 30-day option to purchase up to an additional 15% of Notes in the proposed offering. Barclays Capital Inc. is acting as sole book-running manager for the offering.
The Notes will be senior unsecured obligations of RAIT and will pay interest semi-annually. The interest rate, conversion rate, offering price and other terms of the Notes will be determined at the time of pricing of the offering.
RAIT currently intends to use a portion of the net proceeds from the sale of the Notes for working capital and general trust purposes, including potential repurchases of its outstanding 7.00% Convertible Senior Notes which mature on April 1, 2031. RAIT also intends to use a portion of the net proceeds of this offering to fund payment of the cost of a capped call transaction with an affiliate of Barclays Capital Inc., which is generally expected to reduce potential dilution to holders of our common shares upon the potential conversion of the Notes. The capped call transaction is a separate transaction and is not part of the terms of the Notes and will not affect the holders’ rights under the Notes.
In connection with establishing its initial hedge of the capped call transaction, the hedge counterparty expects to enter into various derivative transactions with respect to RAIT’s common shares concurrently with or shortly after the pricing of the Notes, including with certain investors in the Notes. These activities could have the effect of increasing or preventing a decline in the price of the common shares concurrently with or following the pricing of the Notes.The Notes will be offered and sold under RAIT’s effective shelf registration statement, as amended, on file with the Securities and Exchange Commission (the “SEC”). Before you invest, you should read the prospectus and prospectus supplement relating to the offering of the Notes and other documents RAIT has filed with the SEC for more complete information about RAIT and the offering of the Notes. You may obtain electronic copies of these filed documents at the SEC web site at www.sec.gov. Copies of the preliminary prospectus supplement and accompanying prospectus relating to the offering of the Notes may also be obtained by requesting copies from the book-running manager by contacting Barclays Capital Inc., c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717, telephone at (888) 603-5847 or by e-mail at Barclaysprospectus@broadridge.com. This press release does not constitute an offer to sell or a solicitation of an offer to buy the Notes, nor does it constitute an offer, solicitation or sale of the Notes in any jurisdiction in which such offer, solicitation or sale is unlawful.