Artis greenshoe ups 6% five-year reset preferreds to C$125 million

By Susanna Moon

Chicago, Jan. 31 – Artis Real Estate Investment Trust said underwriters fully exercised the C$25 million over-allotment option on its rate reset preferred trust units with a 6% initial dividend.

This brings the total deal size to C$125 million, according to a company update on Wednesday.

As reported, the company priced C$100 million of the cumulative minimum rate reset preferred trust units on Jan. 22 with a 6% annual dividend for the initial period ending April 30, 2023.

The REIT sold 5 million units of the series I preferreds (DBRS: Pfd-3 (low)) at C$25.00 per unit, which included the greenshoe exercise for 1 million units.

TD Securities Inc., RBC Capital Markets, LLC and Scotia Capital Inc. are the lead underwriters.

The dividend will be reset on April 30, 2023 and every five years thereafter at a rate equal to the greater of the sum of the then five-year Government of Canada bond yield and 393 basis points with a floor of 6%.

The units are redeemable by Artis on April 30, 2023 and on April 30 of every fifth year thereafter.

Series I holders will have the right to reclassify their units into series J cumulative floating-rate preferred trust units on April 30, 2023 and on April 30 of every fifth year thereafter. Series J unit holders will be entitled to receive a floating rate equal to the sum of the then 90-day Government of Canada Treasury Bill yield plus a spread of 393 bps.

Artis plans to use the proceeds to redeem its existing U.S. dollar-denominated series C cumulative redeemable preferred trust units and for general trust purposes.

Artis REIT is a Winnipeg, Man.-based real estate investment trust focused on office, retail and industrial properties.

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