By Marisa Wong
Los Angeles, March 9 – Morguard North American Residential Real Estate Investment Trust completed its previously announced public offering of C$50 million of 6% convertible subordinated debentures due March 31, 2028 on a bought-deal basis, according to a Thursday press release.
The syndicate of underwriters is co-led by RBC Capital Markets LLC, TD Securities Inc. and Scotiabank, with RBC Capital Markets and TD Securities acting as bookrunners for the Regulation S offering.
The debentures are convertible into trust units of the REIT at C$24.15 per unit.
As part of the transaction, Morguard Corp. purchased C$5 million of the debentures at the offering price. Morguard Corp. currently holds about 44.7% effective interest in the REIT through ownership of units and exchangeable class B LP units.
The REIT intends to use proceeds from the convertibles offering, together with existing liquidity, to fund the redemption of all of its 4.5% convertible subordinated debentures, with C$85.5 million currently outstanding, on March 24. The redemption price will be paid in cash and is C$1,000 per debenture together with accrued interest up to but excluding the redemption date.
The Mississauga, Ont.-based open-ended REIT owns, through a limited partnership, interests in Canadian residential apartment communities located in Alberta and Ontario and U.S. residential apartment communities located in Colorado, Texas, Louisiana, Illinois, Georgia, Florida, North Carolina, Virginia and Maryland.
| Issuer: | Morguard North American Residential Real Estate Investment Trust
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| Amount: | C$50 million
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| Issue: | Convertible subordinated debentures
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| Maturity: | March 31, 2028
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| Underwriters: | RBC Capital Markets LLC, TD Securities Inc. (bookrunners) and Scotiabank
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| Coupon: | 6%
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| Conversion price: | C$24.15 per unit
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| Announcement date: | March 9
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| Distribution: | Regulation S
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