Artis REIT greenshoe lifts preferred trust units to C$86.25 million

By Susanna Moon

Chicago, Aug. 10 - Artis Real Estate Investment Trust said underwriters fully exercised the C$11.25 million over-allotment option on its issue of cumulative five-year rate reset preferred trust units, bringing the total deal size to C$86.25 million.

Artis sold a total of 3.45 million series A units, which includes 450,000 units from the greenshoe, at C$25.00 each.

Artis sold C$75 million of the preferred trust units on July 25 to yield an annual dividend of 5.25% for the initial period ending Sept. 30, 2017. The deal was upsized from C$50 million.

RBC Capital Markets Corp., CIBC World Markets Inc. and Macquarie Capital Markets Canada Ltd. were the lead managers.

The series A units are redeemable by Artis on Sept. 30, 2017 and on Sept. 30 of every fifth year thereafter.

The distribution rate will be reset on Sept. 30, 2017 and every five years after that at the then five-year Government of Canada bond yield plus 406 bps.

Holders of series A units will have the right to reclassify all or any part of the units as series B cumulative floating-rate preferred trust units on Sept. 30, 2017 and on Sept. 30 of every fifth year thereafter. The series B units will pay a floating cumulative preferential distribution, payable on the last day of March, June, September and December of each year, at a rate equal to the then 90-day Government of Canada Treasury bill yield plus a spread of 406 bps.

Artis sold the units under a C$2 billion 25-month shelf prospectus for units, preferred units, debt securities, warrants and subscription receipts that was filed on June 15.

Proceeds will be used to fund future acquisitions, to repay debt and for general trust purposes.

Winnipeg, Man.-based Artis is a diversified Canadian real estate investment trust with investments in office, industrial and retail properties.

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