By Stephanie N. Rotondo
Seattle, Nov. 28 – Mainstreet Health Investments Inc. is offering $45 million of 5% convertible unsecured subordinated debentures due Jan. 31, 2022 via a bought deal led by National Bank Financial Inc., BMO Capital Markets and CIBC Capital Markets.
The financing was announced in tandem with the announcement of the acquisition of three memory care communities.
There is a $6.75 million over-allotment option.
The debentures are convertible into common stock at $11.00 per share. That represents a 15.8% premium over the Nov. 28 closing share price.
The company has the option to redeem the securities on or after Jan. 31, 2020 and prior to Jan. 31, 2021, if the stock price hits a 125% price hurdle. The paper can be redeemed at any time for any reason after Jan. 31, 2021.
Proceeds will be used to finance a portion of the purchase price of the memory care center acquisitions and for general corporate purposes.
Mainstreet Health is a Toronto-based health care real estate company.
| Issuer: | Mainstreet Health Investments Inc.
|
| Securities: | Convertible unsecured subordinated debentures
|
| Amount: | $45 million
|
| Greenshoe: | $6.75 million
|
| Maturity: | Jan. 31, 2022
|
| Bookrunners: | National Bank Financial Inc., BMO Capital Markets, CIBC Capital Markets
|
| Coupon: | 5%
|
| Price: | Par of $1,000
|
| Yield: | 5%
|
| Call options: | The company has the option to redeem the securities on or after Jan. 31, 2020 and prior to Jan. 31, 2021, if the stock price hits a 125% price hurdle. The paper can be redeemed at any time for any reason after Jan. 31, 2021
|
| Conversion premium: | 15.8%
|
| Conversion price: | $11.00 per share
|
| Pricing date: | Nov. 28
|
| Settlement date: | Dec. 16
|
| Stock listing: | TSX: HLP-U
|
| Stock price: | $9.50 as of Nov. 28
|
| Market capitalization: | $306.08 million
|
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