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RAIT Files $750M Stock Plan with SEC

PHILADLEPHIA-The REIT has submitted a shelf registration with the Securities and Exchange Commission, allowing flexibility in the timetable for issuing stock.

By Paul Bubny | Updated on July 17, 2008

PHILADELPHIA-Locally based RAIT Financial Trust has filed a shelf registration with the Securities and Exchange Commission allowing it to issue up to $750 million in securities over an unspecified period of time. In accordance with SEC rules, the S-3 form filed Wednesday does not specify a timetable for issuing the stocks or the terms of the offerings. A shelf registration allows a company to issue stocks in one or more offerings and determine the size, price and terms of the offerings at the time of sale.

In its SEC filing, the specialty finance REIT says it may issue up to 200 million common shares and 25 million preferred shares, and will use the funds for general corporate purposes. These purposes may include repayment or redemption of debt, redemption of preferred equity, capital expenditures and working capital. Currently, RAIT has approximately 64 million common shares and 6.5 million preferred shares outstanding. Calls to RAIT for additional details were not returned by deadline.

GlobeSt.com reported in February that RAIT ended 2007 with a $379-million loss including a loss of $183.5 million in Q4 ’07 alone, although its revenue for the quarter was up 25% year-over-year from Q4 2006. Its Q3 loss was $244 million. The losses were related primarily to credit deterioration in the residential mortgage and homebuilder sectors. Last December, GlobeSt.com reported that 10 executive officers of RAIT voluntarily forfeited $11.8 million in equity incentive awards. The largest of these forfeitures was $3.7 million that had been granted to chairman Betsy Cohen. In an SEC filing announcing the forfeitures, Cohen said, “the action of our senior executives reflects their commitment to aligning their long-term incentive compensation with our shareholders’ interests.”

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