By Rebecca Melvin
New York, Oct. 10 – Melcor Real Estate Investment Trust priced C$40 million five-year convertible subordinated debentures 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, which has an over-allotment option for up to an additional C$6 million of debentures.
Concurrently with the issue of debentures, Melcor REIT LP will issue between $10 million and $15 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.
| Issuer: | Melcor Real Estate Investment Trust
|
| Securities: | Convertible unsecured subordinated debenture
|
| Amount: | C$40 million
|
| Greenshoe: | C$6 million
|
| Maturity: | Dec. 31, 2024
|
| Bookrunners: | Syndicate led by CIBC Capital Markets
|
| Concurrent issue: | C$10 million to $15 million of class B LP units
|
| Coupon: | 5.1%
|
| Price: | Par
|
| Yield: | 5.1%
|
| Conversion premium: | About 15%
|
| Conversion price: | C$8.90
|
| Conversion rate: | 112.3596 units
|
| Pricing date: | Oct. 10
|
| Settlement date: | Oct. 29
|
| Stock symbol: | Toronto: MR.UN
|
| Stock price: | C$7.74 as of Oct. 10 close
|
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