Company: RWT-PA
Filing Date: 2025-08-22
Form Type: 424B5
Source: 0001104659-25-081925
Chunk: 20

Company: REDWOOD TRUST INC
Filing Date: 2025-08-22
Form: 424B5
Chunk 20
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 holders to require us to repurchase notes.” However, the definition of “fundamental change” is limited to specified corporate events and may not include other events that might adversely affect our financial condition or the trading price of the notes. For example, events such as leveraged recapitalizations, refinancings, restructurings or acquisitions initiated by us may not constitute a fundamental change requiring us to repurchase the notes. If any such event occurs, the holders of the notes would not have the right to require us to repurchase the notes, even though each of these transactions could increase the amount of our indebtedness, or otherwise adversely affect our capital structure or any credit ratings, thereby adversely affecting the trading price of the notes.

The adjustment to the conversion rate for notes converted in connection with certain make-whole fundamental change events may not adequately compensate holders for the lost option value of their notes as a result of any such event. In addition, the definition of a make-whole fundamental change is limited and may not protect you from losing some of the option value of your notes in the event of a variety of events that do not constitute a make-whole fundamental change.

If certain events that constitute a make-whole fundamental change occur with respect to a note and the holder of such note converts such note in connection with such make-whole fundamental change,

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then, under certain circumstances and subject to certain limitations, we will increase the conversion rate applicable to such conversion by a number of additional shares. The number of additional shares of our common stock will be determined based on the effective date of the make-whole fundamental change and the price paid (or deemed paid) per share of our common stock in the make-whole fundamental change, as described under “Description of Notes — Conversion rights — Adjustment to shares delivered upon conversion upon make-whole fundamental change” in this prospectus supplement.

While the increase in the conversion rate is designed to compensate holders for the lost option value of the notes as a result of the relevant make-whole fundamental change, the increase in the conversion rate is only an approximation of such lost value and may not adequately compensate holders for such loss. In addition, notwithstanding the foregoing, if the price paid (or deemed paid) for our common stock in the make-whole fundamental change is greater than $14.00 per share or less than $9.29 per share (in each case, subject to adjustment in accordance with the indenture), then we will not