PHILADELPHIA--(BUSINESS WIRE)--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.
About RAIT Financial Trust
RAIT Financial Trust is an internally-managed real estate investment trust that provides debt financing options to owners of commercial real estate and invests directly into commercial real estate properties located throughout the United States. In addition, RAIT is an asset and property manager of real estate-related assets.
Forward-Looking Statements and Disclosures
This press release may contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as "may," "will," "expect," "intend," "anticipate," "estimate," "believe," "continue," or other similar words. Because such statements include risks, uncertainties and contingencies, actual results may differ materially from the expectations, intentions, beliefs, plans or predictions of the future expressed or implied by such forward-looking statements. These risks, uncertainties and contingencies include, but are not limited to: risks disclosed in the prospectus and prospectus supplement related to this offering and in our annual report on Form 10-K for the fiscal year ended December 31, 2012 filed with the SEC; the current uncertainty in the global financial markets and the global economy; disruptions in the financial markets that could affect RAIT’s ability to complete this offering or obtain additional financing and RAIT’s ability to repay or repurchase any of its outstanding indebtedness. Statements in this press release should be evaluated in light of these important factors. RAIT is under no obligation to, and expressly disclaims any such obligation to, update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise.