By Angela McDaniels
Tacoma, Wash., Dec. 17 - Dundee REIT sold C$125 million of seven-year convertible unsecured subordinated debentures via a syndicate of underwriters led by TD Securities Inc. and Scotia Capital Inc., according to a company news release.
The debentures will bear interest at 6% per year and will mature on Dec. 31, 2014.
There is an C$18.75 million over-allotment option.
The deal, which is subject to regulatory approval, is expected to settle on Jan. 14.
The debentures will be convertible into series A REIT units at a price of C$41.40 per trust unit. The conversion price is 18% higher than Dundee's closing price of C$35.05 (Toronto: D-UN) on Monday.
From Dec. 31, 2010 through Dec. 30, 2012, the debentures are callable at par plus accrued interest if the trust unit price is 125% of the conversion price or more. Beginning Dec. 31, 2012, the debentures are callable at par plus accrued interest at any time.
Dundee said that at maturity or upon a call, it may pay for the notes with trust units instead of cash. The number of trust units per debenture will equal the amount due divided by 95% of the market price for the trust units at that time. Interest will be paid in cash.
Proceeds will be used for general trust purposes, which may include funding for future acquisitions.
The debentures will not be registered under the U.S. Securities Act of 1933, the REIT noted.
Dundee is a Toronto-based real estate investment trust that owns mid-sized urban and suburban office and industrial properties.
| Issuer: | Dundee REIT
|
| Issue: | Convertible unsecured subordinated debentures
|
| Amount: | C$125 million
|
| Greenshoe: | C$18.75 million
|
| Maturity: | Dec. 31, 2014
|
| Coupon: | 6%
|
| Price: | Par
|
| Conversion price: | C$41.40
|
| Contingent call: | From Dec. 31, 2010 through Dec. 30, 2012 if trust unit price is at least 125% of the conversion price
|
| Call: | At any time beginning Dec. 31, 2012
|
| Underwriters: | TD Securities Inc. and Scotia Capital Inc. (leads)
|
| Announcement date: | Dec. 17
|
| Settlement date: | Jan. 14
|
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