Starwood Property Trust,Inc. (NYSE:STWD) Files An 8-K Entry into a Material Definitive Agreement

Starwood Property Trust,Inc. (NYSE:STWD) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.

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Indenture and Senior Notes due 2021

On January29, 2018, Starwood Property Trust,Inc., a Maryland corporation (the “Company”), issued $500 million aggregate principal amount of its 3.625% unsecured senior notes due 2021 (the “Notes”) under an indenture, dated as of January29, 2018 (the “Indenture”), between the Company and The Bank of New York Mellon, as trustee. The Notes were issued in a private offering exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), to qualified institutional buyers within the United States in accordance with Rule144A under the Securities Act and to non-U.S. persons in offshore transactions in accordance with Regulation S under the Securities Act. The Notes are subject to restrictions on transfer and may only be offered or sold in transactions exempt from or not subject to the registration requirements of the Securities Act and other applicable securities laws.

The Company intends to use the net proceeds from the offering to pay the cash amounts due on its outstanding 4.55% Convertible Senior Notes due 2018 (the “Convertible Senior Notes due 2018”) at maturity or upon conversion, and to use the remaining net proceeds to repay a portion of the amount outstanding under its existing repurchase agreements. The Convertible Senior Notes due 2018 mature on March1, 2018, and, as of September30, 2017, approximately $370 million aggregate principal amount of the Convertible Senior Notes due 2018 was outstanding. The Company expects to deliver shares of its common stock with respect to conversions of Convertible Senior Notes due 2018 to the extent that the conversion value of those notes exceeds the principal amount thereof. Amounts that the Company may repay under its revolving repurchase facilities may be re-borrowed, subject to customary conditions.

The Notes are senior unsecured obligations of the Company and will mature on February1, 2021. The Notes bear interest at a rate of 3.625% per year. Interest on the Notes will be paid semi-annually in arrears on each February1 and August1, commencing August1, 2018, to the persons who are holders of record of the Notes on the preceding January15 and July15, respectively.

The following is a brief description of the terms of the Notes and the Indenture.

Possible Future Guarantees

When the Notes are first issued they will not be guaranteed by any of the Company’s subsidiaries and none of the Company’s subsidiaries will be required to guarantee the Notes in the future, except that, under certain circumstances and subject to certain exceptions set forth in the Indenture, one or more of the Company’s Domestic Subsidiaries (as defined in the Indenture) (except for certain Excluded Subsidiaries or Securitization Entities (each as defined in the Indenture)) may be required to guarantee the payment of the Notes (the “Springing Guarantee Covenant”).

Ranking

The Notes will be:

· require that the Company and its subsidiaries maintain Total Unencumbered Assets (as defined in the Indenture) of not less than 120% of the aggregate principal amount of the outstanding Unsecured Indebtedness (as defined in the Indenture) of the Company and its subsidiaries; and

· impose certain requirements in order for the Company to merge or consolidate with another person.

Certain of these covenants will automatically and permanently terminate and will be of no force or effect on and after the Covenant Termination Date (as defined above).

Events of Default

The Indenture also provides for Events of Default which, if any of them occurs, would permit or require the principal of and accrued and unpaid interest on all the outstanding Notes to become or to be declared due and payable.

The foregoing summary of the Indenture is qualified in its entirety by reference to the full text of such agreement, a copy of which is attached hereto as Exhibit4.1 and incorporated herein by reference.

Registration Rights Agreement

In connection with the issuance of the Notes, the Company entered into a registration rights agreement with J.P. Morgan Securities LLC, as representative of the initial purchasers, dated as of January29, 2018 (the “Registration Rights Agreement”), to which the Company agreed to use its commercially reasonable efforts to (a)consummate an offer to exchange the Notes for its notes with terms substantially identical to those of the Notes no later than January24, 2019 or (b)if such exchange offer is not consummated, file and keep effective a shelf registration statement with respect to resales of the Notes. If the Company fails to satisfy its registration obligations under the Registration Rights Agreement, the Company will be required to pay additional interest to the holders of the Notes as specified in the Registration Rights Agreement.

The foregoing summary of the Registration Rights Agreement is qualified in its entirety by reference to the full text of such agreement, a copy of which is attached hereto as Exhibit4.2 and incorporated herein by reference.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth in Item 1.01 is incorporated herein by reference into this Item 2.03.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit Number

Description

4.1

Indenture, dated as of January29, 2018, between Starwood Property Trust,Inc. and The Bank of New York Mellon, as trustee (including the form of Starwood Property Trust,Inc.’s 3.625% Senior Notes due 2021).

4.2

Registration Rights Agreement, dated as of January29, 2018, between Starwood Property Trust,Inc. and J.P. Morgan Securities LLC, as representative of the initial purchasers.


STARWOOD PROPERTY TRUST, INC. Exhibit
EX-4.1 2 a18-3782_2ex4d1.htm EX-4.1 Exhibit 4.1   INDENTURE   Dated as of January 29,…
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About Starwood Property Trust,Inc. (NYSE:STWD)

Starwood Property Trust, Inc. is a real estate investment trust. The Company operates through three business segments: Real estate lending (the Lending Segment), which engages primarily in originating, acquiring, financing and managing commercial first mortgages, subordinated mortgages, mezzanine loans, preferred equity, commercial mortgage-backed securities (CMBS), residential mortgage-backed securities, and other real estate and real estate-related debt investments; Real estate investing and servicing (the Investing and Servicing Segment), which includes servicing businesses in the United States and Europe that manage and work out problem assets; an investment business that selectively acquires and manages unrated, investment grade and non-investment grade rated CMBS, and a mortgage loan business, and Real estate property (the Property Segment), which engages primarily in acquiring and managing equity interests in stabilized commercial real estate properties.

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