RWTQ: A 9.50% Senior Note IPO From Redwood Trust
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Arbitrage TraderInvesting Group LeaderFollow5ShareSavePlay(13min)CommentsSummaryRedwood Trust has issued new 9.5% Senior Notes due 2030, now trading near par with a 9.75% YTM.RWT's financial health has deteriorated: the debt-to-equity ratio rose, and interest coverage from dividends has weakened significantly over the past year.The new RWTQ notes carry a notably higher risk premium than previous issues, reflecting increased credit risk.I am avoiding RWTQ due to worsening capital structure and better fixed-income alternatives, pending a clear improvement in RWT's financial metrics.fadfebrian/iStock via Getty Images Co-authored by Relative Value. Overview With this article, we continue our line of work, dedicated to monitoring the newly listed fixed-income securities on the exchange. This time, our focus is on Redwood Trust's (RWT) latestThis article was written byArbitrage Trader15.47K FollowersFollowArbitrage Trader, aka Denislav Iliev has been day trading for 15+ years and leads a team of 40 analysts. They identify mispriced investments in fixed-income and closed-end funds based on simple-to-understand financial logic. Denislav leads the investing group Trade With Beta, features of the service include: frequent picks for mispriced preferred stocks and baby bonds, weekly reviews of 1200+ equities, IPO previews, hedging strategies, an actively managed portfolio, and chat for discussion. Learn more.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.