8-K

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): April 14, 2014

RAIT Financial Trust
__________________________________________
(Exact name of registrant as specified in its charter)

Maryland	1-14760	23-2919819
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)
2929 Arch St., 17th Floor, Philadelphia, Pennsylvania		19104
_________________________________ (Address of principal executive offices)		___________ (Zip Code)

Registrant’s telephone number, including area code: (215) 243-9000

Not Applicable
______________________________________________
Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

On April 14, 2014, RAIT Financial Trust issued $60.0 million aggregate principal amount of our 7.625% Senior Notes due 2024, or the notes, in a public offering registered under the Securities Act of 1933, as amended, or the Securities Act. We issued the notes under a base indenture, dated December 10, 2013, between us and Wells Fargo Bank, National Association, as trustee, as supplemented by a first supplemental indenture dated December 10, 2013 and as further supplemented by a second supplemental indenture dated as of April 14, 2014. The offering of the notes was the offering contemplated by the underwriting agreement we previously disclosed in our current report on Form 8-K filed April 11, 2014. In this report, we refer to the base indenture, as supplemented by the supplemental indentures, collectively as the indenture.

In general, the notes:

• are our general unsecured, senior obligations;

• are initially limited to an aggregate principal amount of $60,000,000 (or $69,000,000 if the underwriters exercise in full their option to purchase additional notes);

• bear cash interest from April 14, 2014 at an annual rate of 7.625% payable on January 15, April 15, July 15 and October 15 of each year, beginning on July 15, 2014;

• are subject to redemption at our option, in whole or in part, at any time on or after April 15, 2017, at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date;

• are subject to repurchase by us at the option of the holders following a defined fundamental change, at a repurchase price equal to 101% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date;

• mature on April 15, 2024, unless earlier redeemed or repurchased by us;

• are issued in minimum denominations of $25 and integral multiples of $25 in excess thereof;

• are represented by one or more registered notes in global form, but in certain limited circumstances may be represented by notes in definitive form; and

• were listed on the NYSE on April 17, 2014.

None of our subsidiaries, affiliates or any other person has guaranteed the payment of principal, premium, if any, or interest on the notes or has any other obligation in connection with the notes.

The indenture contains limited financial covenants. The indenture does not restrict our or our subsidiaries’ ability to pay dividends, incur liens, sell less than substantially all of our assets, enter into transactions with affiliates, enter into sale-leaseback transactions, enter into agreements that restrict the ability of our subsidiaries to make distributions to us or make investments, issue or repurchase our other securities or secure indebtedness with the assets, stock or equity interests of our subsidiaries. The indenture restricts, but does not eliminate, our and our subsidiaries’ ability to incur indebtedness, including indebtedness that would be senior to the notes. Other than in connection with a fundamental change (as defined in the indenture) or in certain circumstances relating to our consolidation, merger or sales of assets, the indenture does not contain any covenants or other provisions designed to afford holders of the notes protection in the event of a highly leveraged transaction involving us or in the event of a decline in our credit rating as the result of a takeover, recapitalization, highly leveraged transaction or similar restructuring involving us that could adversely affect such holders.

We may, without the consent of the holders, reopen the indenture for the notes and issue additional notes under the indenture with the same terms as the notes offered hereby in an unlimited aggregate principal amount; provided, however, that no additional notes may be issued if an event of default has occurred and is continuing with respect to the notes.

Each of the following is an "event of default" with respect to the notes:

• default in the payment of any principal amount or any redemption price or repurchase price due with respect to the notes, when the same becomes due and payable;

• default in payment of any interest (including special interest, if any) under the notes, which default continues for 30 days;

• our failure to provide a defined fundamental change company notice when due, which default continues for five days;

• our failure to comply with our obligations relating to the indenture’s financial covenants and restrictions on our consolidation, merger or sales of assets;

• our failure to comply with any other term, covenant or agreement in the notes or the indenture upon our receipt of notice of such default from the trustee or from holders of not less than 25% in aggregate principal amount of the notes then outstanding, and the failure to cure (or obtain a waiver of) such default within 60 days after receipt of such notice;

• default in the payment of principal when due on, or any other default resulting in the acceleration of, other indebtedness of ours or of any significant subsidiary of ours for borrowed money where the aggregate principal amount with respect to which the default or acceleration has occurred exceeds $25.0 million and such indebtedness is not discharged, or such default in payment or acceleration is not cured or rescinded, prior to written notice of acceleration of the notes;

• failure by us or any of our significant subsidiaries to pay final judgments entered by a court or courts of competent jurisdiction aggregating in excess of $25.0 million, which judgments are not paid, discharged or stayed for a period of 30 days; and

• certain events of bankruptcy, insolvency or reorganization affecting us or any of our significant subsidiaries.

As used in the indenture, "significant subsidiary" means a significant subsidiary of ours as defined in Regulation S-X promulgated under the Securities Act, provided that it shall not include (i) any entity consolidated by us where we hold 50 percent or less of the voting power of such entity or (ii) any bankruptcy remote, special purpose entity, used to securitize assets and consolidated by us, whose indebtedness is without recourse to us.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The disclosure in Item 1.01 above is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit
Number Description of Documents

4.1 Indenture, dated December 10, 2013, between RAIT Financial Trust, as issuer, and Wells Fargo Bank, National Association, as trustee, incorporated by reference to RAIT Financial Trust’s Form 8-K as filed with the SEC on December 13, 2013.

4.2 First Supplemental Indenture, dated as of December 10, 2013, between RAIT Financial Trust, as issuer, and Wells Fargo Bank, National Association, as trustee, incorporated by reference to RAIT Financial Trust’s Form 8-K as filed with the SEC on December 13, 2013.

4.3 Second Supplemental Indenture, dated as of April 14, 2014, between RAIT Financial Trust, as issuer, and Wells Fargo Bank, National Association, as trustee, incorporated by reference to RAIT Financial Trust’s Form 8-A as filed with the SEC on April 14, 2014.

4.4 Form of 7.625% Senior Notes due 2024 (included as Exhibit A to Exhibit 4.3 hereto).

5.1 Opinion of Duane Morris LLP regarding legality.

5.2 Opinion of Ledgewood, a professional corporation.

8.1 Opinion of Ledgewood, a professional corporation.

23.1 Consent of Duane Morris LLP (included in Exhibit 5.1).

23.2 Consent of Ledgewood, a professional corporation (included in Exhibit 5.2).

23.3 Consent of Ledgewood, a professional corporation (included in Exhibit 8.1).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	RAIT Financial Trust
April 17, 2014	By:	/s/ James J. Sebra
		Name: James J. Sebra
		Title: Chief Financial Officer and Treasurer

Exhibit Index

Exhibit No.	Description
5.1	Opinion of Duane Morris LLP regarding legality (including Exhibit 23.1 Consent of Duane Morris LLP).
5.2	Opinion of Ledgewood, a professional corporation (including Exhibit 23.2 Consent of Ledgewood, a professional corporation).
8.1	Opinion of Ledgewood, a professional corporation (including Exhibit 23.3 Consent of Ledgewood, a professional corporation).

EX-5.1

DUANE MORRIS LLP
111 S. Calvert Street, Suite 2000
Baltimore, MD 21202

April 14, 2014

RAIT Financial Trust
Cira Centre, 2929 Arch Street, 17th Floor
Philadelphia, PA 19104

Re: Underwriting Agreement, dated April 7, 2014, between RAIT Financial Trust and the several underwriters listed on Schedule A thereto for whom Barclays Capital Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and Keefe, Bruyette & Woods, Inc., a Stifel Company are acting as the Representatives

Ladies and Gentlemen:

We have acted as your special Maryland counsel for the limited purpose of rendering certain opinions in connection with the sale and issuance of the Securities pursuant to the Underwriting Agreement, dated April 7, 2014, between RAIT Financial Trust (the “Company,” “you,” or “your”) and the several underwriters listed on Schedule A thereto for whom Barclays Capital Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and Keefe, Bruyette & Woods, Inc., a Stifel Company are acting as the Representatives (the “Underwriting Agreement”). Capitalized terms defined in the Underwriting Agreement and used (but not otherwise defined) herein are used herein as so defined. This opinion is being rendered to you for submission to the Commission (as herein defined) as an exhibit to the Registration Statement (as herein defined). In regard to rendering the opinions herein, you should note that we did not participate in any aspect of the drafting or negotiation of any of the Principal Agreements (as herein defined). The Securities will be issued pursuant to a base indenture, dated as of December 10, 2013, by and between the Company and Wells Fargo, National Association, as trustee (the “Trustee”), as supplemented by a supplemental indenture, dated as of December 10, 2013, as further amended and supplemented by the second supplemental indenture to be dated as of April 14, 2014 by and between the Company and the Trustee (the base and supplemental indentures together being, the “Indenture”).

For purposes of rendering this opinion, we have examined originals or copies (certified or otherwise identified to our satisfaction) of:

(a) The Underwriting Agreement;

(b) The Indenture;

(c) The Securities;

(d) The Registration Statement on Form S-3 relating to the Securities (File Number 333-175901), that was declared effective by the Securities and Exchange Commission (the “Commission”) on September 9, 2011 under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder by the Commission, as such registration statement has been amended and supplemented to date (the “Registration Statement);

(e) The Amended and Restated Declaration of Trust, as amended, corrected and supplemented, of the Company (the “Declaration”), certified as of April 11, 2014 by the State Department of Assessments and Taxation of the State of Maryland (the “SDAT”);

(f) The Bylaws of the Company, certified as of the date hereof by the Secretary of the Company (the “Bylaws”)

(g) All resolutions adopted by the Board of Trustees of the Company, or committees thereof, relating to (i) the authorization, execution and delivery of the Underwriting Agreement and Indenture and the transactions contemplated thereby, and (ii) the registration, sale and issuance of the Securities in accordance with the Indenture, each as certified as of the date hereof by the Secretary of the Company;

(h) A certificate of the SDAT as to the good standing of the Company, dated as of April 14, 2014; and

(i) A Certificate of Secretary executed by Raphael Licht, Secretary of the Company, dated as of the date hereof (the “Certificate”).

In such examination, we have assumed: (i) the genuineness of all signatures, (ii) the legal capacity of all natural persons, (iii) the authenticity of all documents submitted to us as originals, (iv) the conformity to original documents of all documents submitted to us as certified, conformed or other copies and the authenticity of the originals of such documents and (v) that all records and other information made available to us by the Company on which we have relied are complete in all material respects. As to all questions of fact material to these opinions, we have relied solely upon the Certificate or comparable documents and upon the representations and warranties contained in the Underwriting Agreement and Indenture and other documents delivered pursuant thereto, and have not performed or had performed any independent research of public records and have assumed that certificates of or other comparable documents from public officials dated prior to the date hereof remain accurate as of the date hereof.

We have also assumed that the Indenture has been duly authorized, executed and delivered by each party thereto other than the Company and constitutes the legal, valid and binding obligations of such parties, enforceable against such parties in accordance with their respective terms.

Based on the foregoing, and subject to the qualifications stated herein, we are of the opinion that:

1. The Company is as a real estate investment trust validly existing and in good standing under the laws of the State of Maryland.

2. The Company has the trust power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement.

3. The Indenture has been duly authorized, executed and delivered by the Company.

4. The Securities have been duly authorized, executed, issued and delivered by the Company and constitute valid, legal and binding obligations of the Company, except as may be limited by bankruptcy, insolvency or other similar laws affecting the rights and remedies of creditors generally and general principles of equity.

The opinions expressed herein are limited to the substantive laws of the State of Maryland, which, in our experience, without having made any special investigation as to the applicability of any specific law, rules or regulation, are normally applicable to transactions of the type contemplated by the Underwriting Agreement (collectively, the “Applicable Laws”). No opinion is expressed as to the effect on the matters covered by this letter of the laws, rules or regulations of (i) the United States of America or (ii) the securities (or as they are known in the vernacular “blue sky”) laws of the State of Maryland, whether in any such case applicable directly or through the Applicable Laws. The opinions expressed herein are subject to the effect of judicial decisions which may permit the introduction of parol evidence to modify the terms or the interpretation of agreements.

The opinions expressed herein are rendered as of the date hereof and are based on existing law, which is subject to change. Where our opinions expressed herein refer to events to occur at a future date, we have assumed that there will have been no changes in the relevant law or facts between the date hereof and such future date. We do not undertake to advise you of any changes in the opinions expressed herein from matters that may hereafter arise or be brought to our attention or to revise or supplement such opinions should the present laws of any jurisdiction be changed by legislative action, judicial decision or otherwise.

Our opinions expressed herein are limited to the matters expressly stated herein and no opinion is implied or may be inferred beyond the matters expressly stated.

The opinions expressed herein are rendered solely for your benefit in connection with your issuance of the Securities. Those opinions may not be used or relied upon by any other person, nor may this letter or any copies hereof be furnished to a third party, filed with a governmental agency, quoted, cited or otherwise referred to without our prior written consent. Notwithstanding the foregoing, we hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of the name of our firm therein under the heading “Legal Matters”. In giving this consent, we do not admit that we are within the category of person whose consent is required by Section 7 of the Act.

Very truly yours,

/s/ DUANE MORRIS LLP

LEDGEWOOD
A PROFESSIONAL CORPORATION

1900 Market Street, Suite 750, Philadelphia, PA 19103

TEL 215.731.9450 FAX 215.735.2513

www.ledgewood.com

April 14, 2014

RAIT Financial Trust 
Cira Centre 
2929 Arch Street, 17th Floor 
Philadelphia, PA 19104

Ladies and Gentlemen:

We have acted as counsel to RAIT Financial Trust (the “Company”) in connection with its offer and sale of $60.0 million aggregate principal amount of the Company’s 7.625% senior notes due 2024 (the “Securities”), issued pursuant to the Company’s prospectus supplement dated April 7, 2014 (the “Prospectus Supplement”) and the base prospectus dated September 9, 2011 (collectively, the “Prospectus”), forming part of the Registration Statement on Form S-3 (Registration No. 333-175901) (collectively, the “Registration Statement”). The Securities were issued pursuant to a base indenture, dated as of December 10, 2013, by and between the Company and Wells Fargo, National Association, as trustee (the “Trustee”), as supplemented by a supplemental indenture, dated as of December 10, 2013, as further amended and supplemented by the second supplemental indenture dated as of April 14, 2014 by and between the Company and the Trustee (the base indenture and supplemental indentures are collectively referred to herein as the “Indenture”).

In connection with our representation of the Company, and as a basis for the opinions hereinafter set forth, we have examined originals or copies, certified or otherwise identified to our satisfaction, of the following documents:

(a) The Underwriting Agreement dated April 7, 2014 by and among the Company, and Barclays Capital Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and Keefe, Bruyette & Woods, Inc., as representatives of the several underwriters;

(b) The Indenture;

(c) The Securities; and

(d) The Registration Statement.

In our examination of the documents referred to above, we have assumed the genuineness of all signatures, the legal capacity of all signatories and the authenticity of all documents submitted to us as originals and the conformity to the original documents of all documents submitted to us as certified or photostatic copies. We are not aware of any facts which would lead us to conclude that any such signatures are not genuine, that any signatory lacked legal capacity or that any document submitted to us is not authentic and, if a copy, that it does not conform to the original.

Our opinion hereinbelow expressed are subject to the following limitations:

1. In accordance with our general policies, we have assumed that no fraud or dishonesty exists with respect to any matters relevant to the opinions hereinbelow expressed. We have no reason to believe that the foregoing assumption is incorrect.

2. Our opinion is subject to the effect of bankruptcy, insolvency, reorganization, arrangement, moratorium, preferential or fraudulent conveyance, or other similar laws or equitable principles (regardless of whether enforcement is sought in a proceeding at law or in equity) relating to or affecting the rights and remedies of creditors generally and by general principles of equity, regardless of whether considered in a proceeding in equity or at law. In addition, we express no opinion regarding rights to indemnification and contribution to the extent that they may be limited or held unenforceable under applicable federal or state securities laws or public policy underlying such laws.

3. The opinion expressed in this letter is limited to the matters set forth in this letter, and no other opinions should be inferred beyond the matters expressly stated.

4. We are attorneys admitted to practice before the courts of the United States, the Commonwealth of Pennsylvania, the State of New York and the State of New Jersey. The opinions set forth herein are limited to matters governed by the laws of the United States and the State of New York, without reference to choice of law provisions thereunder. No opinion is expressed with respect to the laws of any other state or to the application of any such laws. As to matters concerning the due authorization, execution and delivery of the Securities constituting the valid, legal and binding obligations of the Company, we have relied upon the opinion of Duane Morris LLP, a copy of which has been furnished to you contemporaneously herewith, which opinion is subject to certain qualifications and limitations therein set forth which are incorporated in this letter by this reference.

Based upon and subject to the foregoing, and having regard for such legal considerations as we have considered necessary for purposes hereof, we are of the opinion that the Securities are enforceable against the Company in accordance with their terms.  

This opinion is being furnished to you for submission to the Securities and Exchange Commission (the “Commission”) as an exhibit to the Company’s Current Report on Form 8-K, which is incorporated by reference in the Registration Statement in accordance with the requirements of Form S-3 and the rules and regulations promulgated under the Securities Act. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of the name of our firm in the section entitled “Legal Matters” in the Prospectus. In giving this consent, we do not admit that we are within the category of persons whose consent is required by Section 7 of the Securities Act or the rules and regulations promulgated thereunder by the Commission.

This opinion is limited to the matters stated in this letter, and no opinion may be implied or inferred beyond the matters expressly stated in this letter. This opinion is given as of the date hereof, and we assume no obligation to advise you after the date hereof of facts or circumstances that come to our attention or changes in the law, including judicial or administrative interpretations thereof, that occur which could affect the opinions contained herein.  

Very truly yours,

/s/ Ledgewood
LEDGEWOOD
a professional corporation

LEDGEWOOD
A PROFESSIONAL CORPORATION

1900 Market Street, Suite 750, Philadelphia, PA 19103

TEL 215.731.9450 FAX 215.735.2513

www.ledgewood.com

April 14, 2014

RAIT Financial Trust 
Cira Centre 
2929 Arch Street, 17th Floor 
Philadelphia, PA 19104

Ladies and Gentlemen:

We have acted as counsel to RAIT Financial Trust (the “Company”) in connection with its offer and sale of $60.0 million aggregate principal amount of the Company’s 7.625% senior notes due 2024, issued pursuant to the Company’s prospectus supplement dated April 7, 2014 (the “Prospectus Supplement”) and the base prospectus dated September 9, 2011 (collectively, the “Prospectus”), forming part of the Registration Statement on Form S-3 (Registration No. 333-175901) (collectively, the “Registration Statement”). You have requested our opinion regarding certain U.S. federal income tax matters. Capitalized terms not otherwise defined herein shall have the meaning set forth in that certain Underwriting Agreement dated April 7, 2014 by and among you and Barclays Capital Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and Keefe, Bruyette & Woods, Inc., as representatives of the several underwriters.

We are opining herein as to the effect on the subject transaction only of the federal income tax laws of the United States, and we express no opinion with respect to the applicability thereto, or the effect thereon, of other federal laws, foreign laws, the laws of any state or any other jurisdiction or as to any matters of municipal law or the laws of any other local agencies within any state. We hereby confirm that all statements of legal conclusions contained in, or incorporated by reference into, Exhibit 99.1 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, as supplemented by the discussion in the Prospectus Supplement under the caption “Additional Material U.S. Federal Income Tax Considerations,” constitute the opinion of Ledgewood, P.C. with respect to the matters set forth therein as of the effective date of the Registration Statement, subject to the assumptions, qualifications, and limitations set forth therein. No opinion is expressed as to any matter not discussed therein.

This opinion is rendered to you as of the effective date of the Registration Statement, and we undertake no obligation to update this opinion subsequent to the date hereof. This opinion is based on various statutory provisions, regulations promulgated thereunder and interpretations thereof by the Internal Revenue Service and the courts having jurisdiction over such matters, all of which are subject to change either prospectively or retroactively. Also, any variation or difference in the facts from those set forth in the representations described above, including in the Registration Statement, may affect the conclusions stated herein.

This opinion is furnished to you, and is for your use in connection with the transactions set forth in the Registration Statement. This opinion may not be relied upon by you for any other purpose or furnished to, assigned to, quoted to or relied upon by any other person, firm or other entity, for any purpose, without our prior written consent.

We hereby consent to the filing of this opinion of counsel as Exhibit 8.1 to the Current Report on Form 8-K of the Company dated on or about the date hereof, to the incorporation by reference of this opinion of counsel into the Registration Statement and to the reference to our firm in the Prospectus and the Prospectus Supplement. In giving such consent, we do not admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended.

Very truly yours,

/s/ Ledgewood

Ledgewood

a professional corporation