Starwood Property Trust IPO Plans to Invest in Real Estate Debt

| About: Starwood Property (STWD)

Starwood Property Trust (NYSE:STWD) is expected to go public this week. The company is planning to invest in commercial mortgage loans and real estate debt. According to Reuters, the company raised the proposed size of its offering by 35% today.

Business Overview (from prospectus)

Starwood Property Trust, Inc. is a newly organized Maryland corporation focused primarily on originating, investing in, financing and managing commercial mortgage loans and other commercial real estate debt investments, commercial mortgage-backed securities, or CMBS, and other commercial real estate-related debt investments. We may also invest in residential mortgage loans and residential mortgage-backed securities, or RMBS. We collectively refer to commercial mortgage loans, other commercial real estate debt investments, CMBS, other commercial real estate-related debt investments, residential mortgage loans, and RMBS as our target assets.

Offering: 33.8 million shares at $20 per share. Net proceeds of approximately $652.8 million will be used to acquire target assets in accordance with the objectives and strategies described in the prospectus.

Lead Underwriters: Merrill Lynch, Deutsche Bank, Citi

Financial Highlights:

As of the date of this prospectus, we have not commenced any significant operations because we are in our organizational stage. We will not commence any significant operations until we have completed this offering and the concurrent private placement. We are not aware of any material trends or uncertainties, other than national economic conditions affecting mortgage loans, mortgage-backed securities and real estate, generally, that may reasonably be expected to have a material impact, favorable or unfavorable, on revenues or income from the acquisition of real estate-related assets, other than those referred to in this prospectus.


Our net income will depend, in part, on our ability to acquire assets at favorable spreads over our borrowing costs. In acquiring our target assets, we will compete with other REITs, specialty finance companies, savings and loan associations, banks, mortgage bankers, insurance companies, mutual funds, institutional investors, investment banking firms, financial institutions, governmental bodies and other entities.

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