By Rebecca Melvin
Princeton, N.J., Sept. 29 - Canada's Royal Host Real Estate Investment Trust said it has agreed to sell C$50 million of 10-year convertibles to yield 6% with a C$6.85 conversion price.
The deal was offered on a bought-deal basis through a syndicate of underwriters led by National Bank Financial Inc. and BMO Nesbitt Burns Inc., the company said in a release.
The debentures can be converted into trust units at the conversion price of C$6.85 per trust unit.
Proceeds will be used to reduce indebtedness on income producing properties with slightly less than half of the remainder earmarked to reduce other debt, to upgrade and reposition Royal Host's existing hotel properties, and for working capital and general trust purposes, including future acquisitions of hotel properties.
Calgary, Alta.-based Royal Host owns hotels, and manages properties and franchises. Its stock closed at C$5.97 Thursday.
| Issuer: | Royal Host Real Estate Investment Trust
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| Issue: | Convertible unsecured subordinated debentures
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| Amount: | C$50 million
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| Bookrunners: | National Bank Financial Inc. and BMO Nesbitt Burns Inc.
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| Maturity: | Oct. 31, 2015
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| Coupon: | 6%
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| Price: | Par
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| Yield: | 6%
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| Conversion price: | C$6.85
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| Pricing date: | Sept. 29
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| Settlement date: | Oct. 2
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