Chicago, Jan. 28 – American Hotel Income Properties REIT LP announced that it has issued $50 million of 8% series C perpetual preferred equity stock on a private placement basis to BentallGreenOak Real Estate Advisors LP and Highgate Capital Investments, LP through HCI-BGO Victoria JV LP, according to a press release.
The dividend starts at 8% for the first three years and will increase to 9% on the third anniversary and will further escalate after the fifth anniversary.
The preferred stock is newly created with 19,608,775 warrants to acquire units of AHIP.
The $50 million increases the total liquidity of the company to $75 million, up from $40 million at Sept. 30.
The exercise price for the warrants of $3.20 per unit represents a 30.5% premium over AHIP’s closing price of C$3.14 on Jan. 28, a 31.8% premium to the 10-day volume weighted average Canadian dollar trading price.
The warrants are exercisable at any time prior to Jan. 28, 2026.
The warrants will lead to an exercised ownership position of less than 19.99%.
HCI-BGO has the right to nominate two directors to AHIP’s board. The investor also has customary registration rights, participation rights and certain standstill and transfer restriction rights including a 24-month lockup on both the purchased preferred stock and the purchased warrants.
American Hotel Income Properties has headquarters in Vancouver. The REIT was formed to invest in hotel real estate across the United States.
| Issuer: | American Hotel Income Properties REIT LP
|
| Amount: | $50 million
|
| Maturity: | Perpetual
|
| Investor: | HCI-BGO Victoria JV LP, or BentallGreenOak Real Estate Advisors LP and Highgate Capital Investments, LP
|
| Description: | Series C perpetual preferred equity stock
|
| Dividend: | 8% initial rate; 9% after three years; higher after five years
|
| Warrants: | 19,608,775 warrants exercisable at $3.20 per unit
|
| Premium: | 30.5% premium
|
| Stock price: | C$3.14 on Jan. 28
|
| Announcement date: | Jan. 28
|
| Distribution: | Private placement
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