IPO PRICING: Starwood Property Trust, Inc. (STWD)

Starwood Property Trust, Inc. (NYSE: STWD) has priced its initial public offering of 40,500,000 shares of common stock at a price of $20.00 per share.  This is an externally managed company and the underwriting group is huge on the deal.

BofA Merrill Lynch, Deutsche Bank, and Citi were listed as the joint book-running managers;   Barclays, Wells Fargo, Calyon Securities, Cantor Fitzgerald, Piper Jaffray, and Scotia Capital are all listed as co-managers.   The underwriting group has been granted a 30-day option to purchase up to an additional 6,075,000 shares at the $20.00 per share public offering price to cover overallotments.

Starwood Property Trust, Inc. will be externally managed and advised by SPT Management, LLC, which is an affiliate of Starwood Capital Group,  That is a privately-held private equity firm that has invested $6.8 billion of equity capital in most major sectors of real estate that represents roughly $20.2 billion in assets since inception.  Starwood Capital Group was founded and is controlled by Barry Sternlicht.

SPT Investment, LLC is an affiliate of Starwood Capital Group controlled by Mr. Sternlicht and it will purchase 1,000,000 shares of common stock at the same $20.00 per share in a private placement.

The company noted that gross proceeds of the are expected to be approximately $830 million before discounts and fees if the overallotment option is not exercised. Starwood Property Trust, Inc. intends to use the net proceeds to originate, finance and invest in commercial mortgage loans and other commercial real estate-related debt investments.

JON C. OGG
AUGUST 12, 2009