- $100 million investment to be drawn at RAIT’s discretion, subject to customary draw down conditions, from time to time over the next two years for a combination of RAIT securities including the following:
- 4.0 million Series D Cumulative Redeemable Preferred Shares (the “Series D Preferred Shares”) bearing a cash coupon rate initially of 7.5% and increasing at regular intervals thereafter. Ranks on parity with RAIT’s existing outstanding preferred shares. Liquidation preference equal to $26.25 per share for five years and $25.00 per share thereafter.
- The Series D Preferred Shares will be issued in combination with warrants (the “Warrants”) exercisable for, in the aggregate, up to 9,931,000 of RAIT’s common shares (the “Common Shares”) for an exercise price of $6.00 per Common Share, in each case subject to adjustment.
- The Series D Preferred Shares will also be issued in combination with Common Shares appreciation rights (“SARs”) with respect to, in the aggregate, up to 6,735,667 Common Shares for an exercise price of $6.00 per Common Share, in each case subject to adjustment. Any SARs exercise may be settled by RAIT with cash or by issuing a note. RAIT will not issue any Common Shares upon exercise of the SARs.
- Use of proceeds: to fund RAIT’s loan origination and investment activities, including CMBS and bridge lending.
- The Investor will have the right to designate one member of the Board following the first funding of $20 million, expected on October 17, 2012, and for so long as it maintains a minimum ownership in RAIT’s securities. Mr. Silberstein will serve as this designee.
The Series D Preferred Shares, Warrants, the Common Shares underlying the Warrants and SARs have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. This press release does not constitute an offer to sell, or a solicitation of an offer to buy, any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering would be unlawful.Please see RAIT’s SEC filings for further important information about this transaction, including additional terms of these securities.