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InnVest REIT tenders for C$28.75 million of series G convertibles
By Susanna Moon
Chicago, June 17 InnVest Real Estate Investment Trust said it will tender for up to C$28.75 million of series G convertible unsecured subordinated debentures.
The purchase price will be C$1,060 for each C$1,000 principal amount plus any accrued interest.
The offer represents a premium of C$40 to the closing price of C$1,020 on the Toronto Stock Exchange on June 16 and a premium of about C$44 to the volume-weighted average trading price of C$1,016 on the exchange for the 20 trading days ended June 16, in each case per C$1,000 principal amount, according to a company press release.
InnVest said it plans to hold a meeting for noteholders on July 22 in Toronto, Ont., to approve an extraordinary resolution to approve amendments to the notes indenture.
The amendment would
Increase the coupon to 6.25% from 5.75%, effective as of the beginning of the next interest accrual period on Sept. 30; and
Increase the conversion price for each InnVest unit to be issued upon the conversion of one series G debenture to C$8.00 per unit from C$5.80.
The trust units (Toronto: INN.UN) closed at C$5.01 on June 16.
The tender offer is conditioned on approval of the amendments at the meeting, which requires votes in favor of the measure from holders representing at least 66 2/3% of the notes.
InnVest is seeking to maintain financial flexibility to pursue its investment strategy and to build value for its unitholders, the release noted.
The excess cash from identified non-strategic dispositions allows for InnVest to lower its leverage by canceling debentures under the offer, while the proposed indenture amendments will allow for an improved income return to debentureholders without changing the credit terms, and reduces potential dilution to unitholders, the release added.
The offer is expected to be open until July 25.
InnVest is a Toronto-based holder of hotel real estate.
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