InnVest gets OK to increase convertibles’ coupon, conversion price

By Angela McDaniels

Tacoma, Wash., July 25 – InnVest Real Estate Investment Trust received debentureholder approval to make amendments to the terms of its series G convertible subordinated debentures due 2019 at a special meeting on July 25, according to a company news release.

The amendments increase the interest rate to 6.25% from 5.75% beginning Sept. 30 and increase the conversion price to C$7.50 per trust unit from C$5.80.

A supplemental indenture giving effect to the amendments was executed July 25 and is in effect.

In order to make the amendments, the company needed votes in favor of the measure from holders representing at least two-thirds of the convertibles.

As previously reported, the company is also offering to repurchase up to C$28.75 million of the convertibles at C$1,080 per C$1,000 principal amount plus accrued interest.

The tender offer began June 17 and will end at July 30.

On July 14, the company increased the tender offer price from C$1,060 per C$1,000 principal amount, lowered the proposed conversion price from C$8.00 per unit, postponed the meeting of debentureholders from July 22 and extended the tender offer deadline from July 25.

The tender offer price represents a premium of C$60 to the closing price of C$1,020 on the Toronto Stock Exchange on June 16 and a premium of about C$64 to the volume-weighted average trading price of C$1,016 on the exchange for the 20 trading days ended June 16, according to a company press release.

InnVest is seeking to maintain financial flexibility to pursue its investment strategy and to build value for its unitholders, a prior news 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 company said in the news release.

InnVest is a Toronto-based holder of hotel real estate.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.