By Rebecca Melvin
New York, Dec. 17 - H&R Real Estate Investment Trust priced an upsized C$175 million of 7.5-year convertible unsecured subordinated debentures on a bought-deal basis to yield 6% with an initial conversion premium of 41%, according to a news release.
The deal, sold to a syndicate of underwriters co-led by RBC Capital Markets and CIBC World Markets, was initially going to be C$150 million in size.
H&R also signed a definitive agreement to redeem $185.7 million of warrants issued to Fairfax Financial Holdings Ltd.
The warrants are being redeemed using a reference price of C$13.50, while issuing convertible debentures with a conversion price of C$19.00.
Proceeds from the offering will be used for general trust purposes, and to the extent necessary, to fund a portion of the redemption.
Closing on the debentures is expected by Dec. 30, and maturity is June 30, 2017.
The offering is being made by way of an existing short-form base shelf prospectus.
The debentures are non-callable until June 30, 2013 and then provisionally callable between June 30, 2013 and June 30, 2015, if the VWAP for the units is not less than 125% of the conversion price.
The Fairfax agreement also provides that any warrants remaining outstanding after the redemption will be automatically exercised on a cashless basis, based on a redemption price of C$13.50 per stapled unit.
H&R is an open-ended REIT based in Downsview, Ont.
| Issuer: | H&R Real Estate Investment Trust
|
| Issue: | Convertible unsecured subordinated debentures
|
| Amount: | C$175 million, upsized from C$150 million
|
| Maturity: | June 30, 2017
|
| Bookrunners: | Syndicate co-led by RBC Capital Markets and CIBC World Markets
|
| Coupon: | 6%
|
| Price: | Par, C$1,000
|
| Yield: | 6%
|
| Conversion premium: | 41%
|
| Conversion price: | C$19.00 per trust unit
|
| Call feature: | Non-callable until June 30, 2013, then provisionally callable until June 30, 2015 if VWAP for the units is not less than 125% of conversion price
|
| Pricing date: | Dec. 17
|
| Settlement date: | Dec. 30
|
| Distribution: | Existing short-form prospectus
|
| Stock listing: | Toronto: HR.UN
|
| Stock reference: | C$13.50
|
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