Starwood Property talks $350 million four-year convertibles to yield 6.25%-6.75%, up 12.5%-17.5%

By Abigail W. Adams

Portland, Me., June 22 – Starwood Property Trust Inc. plans to price $350 million of four-year convertible senior notes after the market close on Thursday with price talk for a coupon of 6.25% to 6.75% and an initial conversion premium of 12.5% to 17.5%, according to a market source.

Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, Wells Fargo Securities LLC, BofA Securities Inc., Barclays and Citigroup Global Markets Inc. are bookrunners for the Securities and Exchange Commission-registered offering, which carries a greenshoe of $52.5 million. Goldman Sachs is also the sustainability bond structuring agent.

The notes, which will mature July 15, 2027, are non-callable until April 15, 2027 and then will be freely callable.

They are putable upon a fundamental change.

Proceeds will be used to finance or refinance eligible projects under the company’s sustainable finance framework and for general corporate purposes, which may include the repayment of debt.

Bank of New York Mellon is the trustee.

Counsel to the issuer is provided by Sidley Austin LLP and for matters of Maryland law by Womble Bond Dickinson (US) LLP. Counsel to the underwriters is provided by Skadden, Arps, Slate, Meagher & Flom LLP.

Starwood is a Greenwich, Conn.-based diversified finance company focused on real estate and infrastructure.

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