First Capital Realty lowers conversion price of 5.5% notes for 35 days

By Susanna Moon

Chicago, July 8 - First Capital Realty Inc. said that for a limited time holders may convert their 5.5% convertible subordinated debentures, class CDN and class US, at a lower price.

The company received approval from the Toronto Stock Exchange and holders of about C$212.8 million principal amount outstanding of 5.5% convertibles to temporarily change the conversion privilege of the notes, according to a company press release.

The conversion price was reduced to C$16.25 for 35 days, or a ratio of about 61.538 common shares for each C$1,000 principal amount of debentures, from the current price of C$16.425. The conversion price will be reduced from July 12 to 5 p.m. ET on Aug. 16, the expiration date.

Holders must deliver their conversion notice by the end of the expiration date to get the lower rate.

Gazit Canada Inc. is a holder of about 48.4% of First Capital Realty's outstanding common shares and holder of about 74% of the outstanding 5.5% convertibles and plans to convert at least C$74 million of the notes at the lower price, subject to market conditions, the release noted.

At First Capital's request, Gazit Canada has agreed to limit the conversion over that amount so as to not hold more than half of the common shares as a result of exercising the conversion right at the special conversion price.

Holders who convert their notes also will receive accrued interest up to but excluding the conversion date.

Under the original terms of the notes, the conversion price of the notes will increase to C$17.031 effective Jan. 1, 2012, or a ratio of about 58.716 shares per C$1,000 principal amount of notes.

Beginning Jan. 1, 2012, the notes will be callable at par.

The company said that, consistent with its practice for all of its outstanding convertibles, it plans to satisfy the principal and interest on redemption or at maturity by issuing a number of common shares obtained by dividing the amount payable by 97% of the volume-weighted average trading price of the shares on the Toronto Stock Exchange for the 20 consecutive trading days ending five trading days prior to the date of redemption or maturity.

First Capital is a developer and operator of supermarket and drugstore-anchored shopping centers based in Toronto.

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