PrefBlog

Artis Real Estate Investment Trust (TSX: AX.UN) has announced:

a marketed public offering (the “Financing”) of approximately US$50 million Cumulative Rate Reset Preferred Trust Units, Series C (the “Series C Units”) at a price of US$25 per Series C Unit. The Financing is being led by RBC Capital Markets, CIBC and Macquarie Capital Markets Canada Ltd. (the “Underwriters”). Artis has also granted the Underwriters an over-allotment option, exercisable at any time up to 30 days after the closing of the Financing, to purchase additional Series C Units, up to an amount equal to 15% of the number of Series C Units sold pursuant to the Financing. The Financing will be priced in the context of the market with the final terms of the Financing to be determined at the time of pricing.

The Series C Units will pay fixed cumulative preferential distributions, payable on the last day of March, June, September and December of each year, as and when declared by the board of trustees of Artis, for the initial approximately five and a half-year period ending March 31, 2018. The first quarterly distribution, if declared, shall be payable on December 31, 2012. The distribution rate will be reset on March 31, 2018 and every five years thereafter at a rate equal to the sum of the then five-year United States Government bond yield and a spread which will be set upon pricing of this Financing. The Series C Units are redeemable by Artis, at its option, on March 31, 2018 and on March 31 of every fifth year thereafter.

Holders of Series C Units will have the right to reclassify all or any part of their Series C Units as Cumulative Floating Rate Preferred Trust Units, Series D (the “Series D Units”), subject to certain conditions, on March 31, 2018 and on March 31 of every fifth year thereafter. Such reclassification privilege may be subject to certain tax considerations (to be disclosed in the prospectus supplement). Holders of Series D Units will be entitled to receive a floating cumulative preferential distribution, payable on the last day of March, June, September and December of each year, as and when declared by the board of trustees of Artis, at a rate equal to the sum of the then 3-month United States Government Treasury Bill yield plus a spread which will be set upon pricing of this Financing.

The Financing is being made pursuant to the REIT’s base shelf prospectus dated June 15, 2012. The terms of the offering will be described in a prospectus supplement to be filed with Canadian securities regulators.

Artis intends to use the net proceeds from the Financing to repay indebtedness, fund future acquisitions, and for general trust purposes.

They also announced:

that is has priced its previously announced marketed public offering (the “Financing”) of Cumulative Rate Reset Preferred Trust Units, Series C (the “Series C Units”). Artis will issue 3.0 million Series C Units at a price of US$25 per Series C Unit for gross proceeds to Artis of US$75,000,000.

The Financing is being led by RBC Capital Markets, CIBC and Macquarie Capital Markets Canada Ltd. (the “Underwriters”).

The Series C Units will pay fixed cumulative preferential distributions of US$1.3125 per unit per annum, yielding 5.25% per annum, payable on the last day of March, June, September and December of each year, as and when declared by the board of trustees of Artis, for the initial approximately five and a half-year period ending March 31, 2018. The first quarterly distribution, if declared, shall be payable on December 31, 2012 and shall be US$0.3740 per unit, based on the anticipated closing of the offering of Series C Units of September 18, 2012. The distribution rate will be reset on March 31, 2018 and every five years thereafter at a rate equal to the sum of the then five year United States Government bond yield and 4.46%. The Series C Units are redeemable by Artis, at its option, on March 31, 2018 and on March 31 of every fifth year thereafter.

Holders of Series C Units will have the right to reclassify all or any part of their Series C Units as Cumulative Floating Rate Preferred Trust Units, Series D (the “Series D Units”), subject to certain conditions, on March 31, 2018 and on March 31 of every fifth year thereafter. Such reclassification privilege may be subject to certain tax considerations (to be disclosed in the prospectus supplement).

Holders of Series D Units will be entitled to receive a floating cumulative preferential distribution, payable on the last day of March, June, September and December of each year, as and when declared by the board of trustees of Artis, at a rate equal to the sum of the then 3-month United States Government Treasury Bill yield plus a spread of 4.46%.

The Financing is being made pursuant to the REIT’s base shelf prospectus dated June 15, 2012.

The terms of the offering will be described in a prospectus supplement to be filed with Canadian securities regulators. The Financing is expected to close on or about September 18, 2012 and is subject to regulatory approval.

Artis intends to use the net proceeds from the Financing to repay indebtedness, fund future acquisitions, and for general trust purposes.

It is my understanding that the shares are not rated and that there is no current intention to rectify this matter.

This entry was posted on Tuesday, September 11th, 2012 at 12:17 pm and is filed under New Issues, US Pay. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.