Redwood, Trust But Verify After 90% Distribution Cut

Impact · against what's priced in

Redwood Trust is undergoing a fundamental structural shift from a REIT to a C-Corp following a drastic dividend cut. The combination of high leverage (9:1) and a diminished yield profile creates a negative catalyst that outweighs the benefit of unlocking tax losses.

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In context

The 90% dividend cut removes the primary incentive for yield investors, while high leverage at 9:1 and $682 million in non-core assets leave the company vulnerable to liquidity risks.

Read from the article alone

• RWTNew
• dividends
• corporate restructuring
• dividend cut
• financials
• leverage
• reit
• tax strategy
• value investing