Starwood Property Trust Announces $500 Million Offering of 6.500% Senior Notes Due 2030
Starwood Property Trust, Inc. (NYSE: STWD) has completed its private offering of $500 million in aggregate principal amount of 6.500% senior unsecured notes due October 15, 2030. The notes were issued pursuant to an indenture dated April 8, 2025, between the company and The Bank of New York Mellon, acting as trustee.
Offering Details
Principal amount: $500 million
Interest rate: 6.500% per annum
Maturity: October 15, 2030
Interest payment dates: April 15 and October 15, beginning October 15, 2025
Offering type: Private placement to qualified institutional buyers under Rule 144A and offshore investors under Regulation S
Use of Proceeds
The company intends to allocate an amount equal to the net proceeds to finance or refinance eligible green and/or social projects. These may include both previously incurred and future costs. Until full allocation, proceeds may be used for general corporate purposes, including repayment of existing indebtedness under repurchase facilities.
Capital Structure and Guarantees
The notes are senior unsecured obligations of Starwood Property Trust. They will rank equally with other senior unsecured debt and be subordinate to any secured indebtedness. The notes are initially not guaranteed by any subsidiary. However, under a springing guarantee covenant, certain domestic subsidiaries may be required to provide guarantees in the future, subject to specified conditions.
If a subsidiary becomes a guarantor, its guarantee will be senior unsecured, rank equally with its other senior unsecured debt, and be subordinated to any secured obligations.
Redemption Terms
Prior to April 15, 2030: Redeemable at 100% of principal plus a make-whole premium and accrued interest
On or after April 15, 2030: Redeemable at par plus accrued interest
Before April 15, 2028: Up to 40% of the notes may be redeemed at 106.500% using proceeds from qualifying equity offerings
Change of Control
If a change of control triggering event occurs, the company must offer to repurchase the notes at 101% of their principal amount, plus accrued and unpaid interest.
Covenants
The indenture includes limitations on additional indebtedness, a minimum total unencumbered assets test (not less than 120% of unsecured debt), and restrictions on mergers or consolidations. Certain covenants will terminate permanently once the notes receive investment-grade credit ratings from at least two designated rating agencies and no default is ongoing.
Events of Default
Standard events of default apply, including failure to pay interest or principal, breach of covenants, and certain bankruptcy-related events. These may result in immediate acceleration of amounts due under the notes.
