Starwood Property Trust Expands Financial Landscape with New Transactions
In a strategic move that signals its robust financial health and growth ambitions, Starwood Property Trust, Inc. (NYSE: STWD) has successfully completed a series of capital market transactions in December 2024, paving the way for an enhanced investment strategy ahead. Among these significant moves was the pricing of $500 million in senior unsecured sustainability notes, set to mature in July 2030. This new issuance is swapped to SOFR plus 2.55%, marking the lowest floating-rate spread experienced by the company in the last six years.
Additionally, on December 12, Starwood extended its Term Loan B from July 2026 to January 2030, due to overwhelming demand that allowed them to upsize the transaction from $767 million to $900 million and reduce the spread to SOFR plus 2.25%. This represents the lowest spread ever achieved by Starwood Property Trust. The same day, the company also amended its revolving credit facility, increasing its size to $200 million while extending its maturity to January 2030.
One of the notable achievements in this round of financial maneuvers includes the repricing of their $590 million Term Loan B due in November 2027, which also saw an increase in size from $590 million to $690 million, further reducing the spread to SOFR plus 2.25%.
With these transactions, Starwood Property Trust effectively extended its weighted average corporate debt maturity from a mere 2.2 years to a healthier 3.5 years. This extension is strategic; it significantly lowers borrowing costs while generating $783 million in new capital ready for deployment.
Following the repayment of two sets of unsecured notes due in December 2024 and March 2025, Starwood will successfully eliminate any corporate debt maturities until July 2026, showcasing a stable financial outlook for the foreseeable future.
Barry Sternlicht, Chairman and CEO of Starwood Property Trust, remarked, "We have seen a thawing in the commercial real estate capital markets that has created increased lending opportunities for our low-leverage, diversified business. With a robust pipeline of Q4 and Q1 investments, this incremental low-cost term capital positions us to continue to increase our investing pace in 2025."
The President of the company, Jeffrey DiModica, highlighted the importance of these transactions, stating that they not only bolster liquidity but also reduce funds' cost while extending the debt tenor. "These transactions once again demonstrate STWD's unique access to capital at best-in-class rates, and we are pleased to have fortified and optimized the right side of our balance sheet as we head into what we expect to be a busy 2025," he added.
Overall, these strategic actions position Starwood Property Trust favorably within its market, demonstrating their ambition to capitalize on upcoming investment opportunities and paving the path toward continued growth and profitability in the evolving financial landscape.
Additionally, on December 12, Starwood extended its Term Loan B from July 2026 to January 2030, due to overwhelming demand that allowed them to upsize the transaction from $767 million to $900 million and reduce the spread to SOFR plus 2.25%. This represents the lowest spread ever achieved by Starwood Property Trust. The same day, the company also amended its revolving credit facility, increasing its size to $200 million while extending its maturity to January 2030.
One of the notable achievements in this round of financial maneuvers includes the repricing of their $590 million Term Loan B due in November 2027, which also saw an increase in size from $590 million to $690 million, further reducing the spread to SOFR plus 2.25%.
With these transactions, Starwood Property Trust effectively extended its weighted average corporate debt maturity from a mere 2.2 years to a healthier 3.5 years. This extension is strategic; it significantly lowers borrowing costs while generating $783 million in new capital ready for deployment.
Following the repayment of two sets of unsecured notes due in December 2024 and March 2025, Starwood will successfully eliminate any corporate debt maturities until July 2026, showcasing a stable financial outlook for the foreseeable future.
Barry Sternlicht, Chairman and CEO of Starwood Property Trust, remarked, "We have seen a thawing in the commercial real estate capital markets that has created increased lending opportunities for our low-leverage, diversified business. With a robust pipeline of Q4 and Q1 investments, this incremental low-cost term capital positions us to continue to increase our investing pace in 2025."
The President of the company, Jeffrey DiModica, highlighted the importance of these transactions, stating that they not only bolster liquidity but also reduce funds' cost while extending the debt tenor. "These transactions once again demonstrate STWD's unique access to capital at best-in-class rates, and we are pleased to have fortified and optimized the right side of our balance sheet as we head into what we expect to be a busy 2025," he added.
Overall, these strategic actions position Starwood Property Trust favorably within its market, demonstrating their ambition to capitalize on upcoming investment opportunities and paving the path toward continued growth and profitability in the evolving financial landscape.
Topics Financial Services & Investing）
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