Chicago, June 10 – Dream Industrial REIT sold an C$800 million offering of debentures (DBRS: BBB) in three parts on Thursday, according to a press release.
The company sold one tranche as an add-on for C$200 million. The sale represented a reopening of the 1.662% series A debentures maturing Dec. 22, 2025. The series A notes priced at 99.9. The series A notes will have the same terms as the $250 million of notes issued by the trust on Dec. 22, 2020, except the date of issue and the price. However, they will not initially be fungible with the notes issued in December. They will initially have a different Cusip, until Oct. 18, 2021 when the notes will become fungible with the previous issue.
The company also sold C$200 million of floating-rate series B debentures maturing June 17, 2024. The notes were sold at par. The interest rate is CDOR plus 35 basis points. Interest will be adjusted quarterly.
Also, a third tranche consisting of C$400 million of 2.057% series C green debentures were sold with a June 17, 2027 maturity date. The tranche represents the inaugural issue under the REIT’s recently announced green financing framework. The notes were sold at par. Interest is payable semiannually.
Proceeds will be used in part to fund a portion of the purchase price for the acquisition of shares of a corporation that owns a portfolio of 31 institutional quality, logistics properties across Europe. The acquisition price is expected to be C$850 million. Funding for the acquisition will come from this bond issue, C$287.5 million from a sale of subscription receipts which closed May 31 and in part through cash and a draw on the trust’s revolving line of credit. The trust will also assume the C$500 million of in-place debt of the company being acquired.
Proceeds from the green bonds will also be used to finance and/or refinance eligible green projects within the meaning of the framework.
Some of the proceeds may also be used to repay existing debt.
There will be a redemption of the series B debentures and the green bonds at par if the acquisition is not completed by Aug. 30.
If the acquisition does not happen, the series A notes may instead be used for other proposed acquisitions or for general trust purposes.
Dream Industrial is a Toronto-based unincorporated open-ended real estate investment trust.
| Issuer: | Dream Industrial REIT
|
| Issue: | Debentures
|
| Amount: | C$800 million
|
| Bookrunners: | TD Securities Inc., Scotia Capital Inc., RBC Dominion Securities Inc. and National Bank Financial Inc.
|
| Trade date: | June 10
|
| Settlement date: | June 17
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| Ratings: | DBRS: BBB
|
| Distribution: | Canada
|
|
|
| Series A
|
| Issue: | Series A debentures
|
| Amount: | C$200 million, add-on
|
| Maturity: | Dec. 22, 2025
|
| Coupon: | 1.662%
|
| Price: | 99.9
|
|
|
| Series B
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| Issue: | Floating-rate series B debentures
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| Amount: | C$200 million
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| Maturity: | June 17, 2024
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| Coupon: | CDOR plus 35 bps
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| Price: | Par
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| Yield: | CDOR plus 35 bps
|
|
|
| Green debentures
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| Issue: | Series C green debentures
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| Amount: | C$400 million
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| Maturity: | June 17, 2027
|
| Coupon: | 2.057%
|
| Price: | Par
|
| Yield: | 2.057%
|
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