By Rebecca Melvin
New York, Nov. 12 – Melcor Real Estate Investment Trust has priced C$30 million of extendible convertible debentures on a bought deal basis to yield 5.5% with an initial conversion premium of 25% over the closing unit price Wednesday, according to a news release.
Melcor is also pricing about C$45 million of class B LP units at an issue price of C$10.25 per class B LP.
Proceeds of the debentures and the units are earmarked to finance a portion of the cash component of the purchase price of a C$138.25 million acquisition of commercial properties from Melcor Developments Ltd., the REIT's external asset manager and property manager.
Proceeds of the debentures are also earmarked to repay other debt, to finance future acquisitions and for general trust purposes.
The debenture offering has an over-allotment option for up to an additional C$4.5 million of debentures, which were bought by a syndicate of underwriters co-led by RBC Capital Markets and CIBC.
The maturity date is initially Jan. 15, 2015. Upon closing of the acquisition, the maturity date will automatically be extended to Dec. 31, 2019.
In the event that the Melcor acquisition does not close, the convertible will mature on the initial maturity date.
The deal is being offered in Canada under a short form prospectus and will be eligible for sale in the United States under Rule 144A. Closing is set for Dec. 3.
Edmonton, Alta.-based Melcor develops and manages mixed-use residential communities, business and industrial parks, office space, retail centers and golf courses.
| Issuer: | Melcor Real Estate Invesment Trust
|
| Issue: | Extendible convertible debentures
|
| Amount: | C$30 million
|
| Greenshoe: | C$4.5 million
|
| Concurrent offering: | C$45 million of class B LP units at C$10.25 per unit
|
| Maturity: | Initially Jan. 15, 2015, extendible to Dec. 31, 2019 upon closing of commercial properties acquisition
|
| Bookrunners: | Syndicate co-led by RBC Capital Markets and CIBC
|
| Coupon: | 5.5%
|
| Initial conversion premium: | 25%
|
| Initial conversion price: | C$12.65
|
| Pricing date: | Nov. 12
|
| Settlement date: | Dec. 3
|
| Stock symbol: | Toronto: MR.UN
|
| Stock price: | C$10.10 as of close Nov. 12
|
| Distribution: | Short form prospectus in Canada and in the U.S. under Rule 144A
|
| Market capitalization: | C$113.88 million
|
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