Redwood Trust: 9% Yielding Baby Bonds Still Good For Income Investors

2025-11-03 19:20:56 ET

Introduction

Redwood Trust, Inc. ( RWT ) is an mREIT, which is a real estate investment trust that invests in mortgages. Along with the common shares, the company offers a high-yielding preferred share ( RWT.PR.A ) and three baby bonds, one with a 9% coupon ( RWTO ), and two with a 9.125% coupon ( RWTN ) ( RWTP ). Back in July, I discussed why I continued to support investing in the company’s baby bonds . Today, yields on all of Redwood Trust’s baby bonds have declined, but even at 9%, I believe the longest-dated maturity is a good pick for fixed-income investors....

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