By Abigail W. Adams
Portland, Me., Jan. 25 – Morguard North American Residential REIT upsized to C$75 million its five-year convertible unsecured subordinated debentures, which priced after the market close on Wednesday with a coupon of 4.5% and an initial conversion premium of 32%.
The deal initially came to market at a size of C$70 million but was upsized due to investor demand, according to a company release.
RBC Capital Markets and TD Securities Inc. are joint bookrunners for the deal, which carries a greenshoe of C$10.5 million, according to a company release.
The debentures are convertible into trust units at a conversion price of $20.20 per unit.
As part of the transaction, Morguard Corp. will purchase C$5 million of the debentures.
Proceeds will be used for the full redemption of the company’s outstanding 4.65% convertible debentures, which mature on March 30, 2018. There is currently C$60 million outstanding, according to the company release.
Morguard North American is a Mississauga, Ont.-based open-end real estate investment trust that owns interests in residential apartment communities in Canada and the United States.
| Issuer: | Morguard North American Residential REIT
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| Issue: | Convertible unsecured subordinated debentures
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| Amount: | C$75 million
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| Greenshoe: | C$10.5 million
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| Maturity: | March 31, 2023
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| Coupon: | 4.5%
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| Price: | Par
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| Initial conversion premium: | 32%
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| Conversion price: | $20.20
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| Bookrunners: | RBC Capital Markets and TD Securities Inc.
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| Pricing date: | Jan. 24
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| Settlement: | Feb. 13
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| Distribution: | Short-form prospectus in Canada
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| Stock symbol: | TSX:MRG.UN
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| Stock price: | C$15.30 at market close Jan. 24
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| Market capitalization: | C$515.39 million
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