Melcor REIT greenshoe lifts five-year convertibles to C$46 million

By Sarah Lizee

Olympia, Wash., Oct. 29 – Underwriters for Melcor Real Estate Investment Trust’s recently priced five-year convertible subordinated debentures exercised their over-allotment option in full, bringing the total deal size to C$46 million, according to a press release.

As previously reported, the company priced C$40 million of the convertibles on Oct. 10 to yield 5.1% with an initial conversion premium of about 15%.

A syndicate led by CIBC Capital Markets was underwriter of the bought deal.

Concurrently with the issue of debentures, Melcor REIT LP will issue $10 million of class B LP units. The unit price will have an issue price equal to a 1.5% premium to the five-day volume weighted average price of the trust units of the REIT trading on the Toronto Stock Exchange.

The proceeds of the debentures will go toward the REIT’s acquisition of a commercial property, which is being purchased for about C$54.8 million.

The balance of the purchase price for the acquisition will be funded by a combination of proceeds of the concurrent private placement and a draw on the REIT’s revolving credit facility.

Melcor REIT is an Edmonton, Alta.-based retail, office and industrial real estate investment trust.

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