The upsizing of the offering by a million shares is a clear indication that demand for the new offering is already in place. I don't see the exact numbers yet, but RAS should collect upwards of $58M from the offering.
NCT successfully upsized an offering earlier this year.
I'm sure there are those who will disagree, but I expect that RAS will use a large portion of the proceeds to finance the unrated tranch of a new RAIT securitization.
I would not be surprised if RAS used some of the proceeds to pay down debt.
Investors should take the secondary as an indication that RAS has had great success in writing bridge loans during 1Q and that it anticipates strong loan writing in 2Q.
Bear in mind that when ras increased the div to .12 the offering was in the works. New shares will pay .48. ras has already made arrangements to invest the 58m or so, so we can look for an increase in the div when the earnings come out on 4/29. Am still sitting with the same 30k shares which cost me 9 bucks plus margin expense for 5 years. I do see light at the end of this tunnell around mid 2014.
By the way...bought a ton of exg at 7.87....now 9.39 and pays a 10% div monthly. Worth a look. Best, Sy
I agree that it's very positive for longer term growth and profitability. But short term, they just diluted the stock a little over 13% and there's massive turnover today. I'm wondering if the only thing holding the price up from a more aggressive decline today is a combination of quarter end and ex-divy? If so, we could see a significant dip in the price soon, possibly starting next week.
I hope so, I need another buying opp!
This was a good time to do a secondary for them and it appears to be a good one. People are finally realizing that these REITs doing secondaries are putting the money to good work and that it will be accretive to current shareholders. If I had some spare cash lying around, I would actually buy into this secondary. i don't, so won't, but grats to RAS doing well as of late.
I hope you are right. Getting long term cheap funding would be great for RAS. They have showed that they know how to turn that into real money with their earlier Rait securitizations. I only wonder about the CEO'sresponse during the Q&A in the last cc. He seemed to indicate that they would not be doing something like this, although I just view it as another form of funding other than a bank line or equity, or what have you. So you think he was just saying we are not going to behave like an investment bank issuing securities willi-nilli?
I read his comments somewhat differently. Indeed, my expectation of a late second quarter secondary was based on an expectation of a late second quarter securitization. They have been talking about preserving their expertise in secuirtization for four years. It's hard to imagine they would outright reject this business direction.
The money for the unrated tranche is already out the door, as they originated, and own the loans? They would securitize, and contribute 100% of the loans, and get back something like the 75-90% of proceeds, and residual cash flows.