New Issue: AX FixedReset 5.00%+313

Artis Real Estate Investment Trust has announced:

that it has entered into an agreement to sell to a syndicate of underwriters led by RBC Capital Markets and CIBC (the “Underwriters”), on a bought deal basis, 3,000,000 Cumulative Rate Reset Preferred Trust Units, Series G (“Series G Units”) at a price of $25.00 per Series G Unit for gross proceeds to Artis of $75,000,000 (the “Financing”). Artis has also granted the Underwriters an option, exercisable at any time up to 48 hours prior to the closing of the Financing, to purchase a further 450,000 Series G Units at the issue price which, if fully exercised, would result in additional gross proceeds of $11,250,000.

The Series G Units will pay fixed cumulative preferential distributions of $1.25 per Series G Unit per annum, yielding 5.00% per annum, payable on the last day of January, April, July and October of each year, as and when declared by the board of trustees of Artis, for the initial period ending July 31, 2019. The first quarterly distribution, if declared, shall be payable on October 31, 2013 and shall be $0.3219 per Series G Unit, based on the anticipated closing of the offering of Series G Units of July 29, 2013. The distribution rate will be reset on July 31, 2019 and every five years thereafter at a rate equal to the sum of the then fiveyear Government of Canada bond yield and 3.13%. The Series G Units are redeemable by Artis, at its option, on July 31, 2019 and on July 31 of every fifth year thereafter.

Holders of Series G Units will have the right to reclassify all or any part of their Series G Units as Cumulative Floating Rate Preferred Trust Units, Series H (the “Series H Units”), subject to certain conditions, on July 31, 2019 and on July 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 H Units will be entitled to receive a floating cumulative preferential distribution, payable on the last day of January, April, July and October of each year, as and when declared by the board of trustees of Artis, at a rate equal to the sum of the then 90-day Government of Canada Treasury Bill yield plus a spread of 3.13%.

DBRS Limited (“DBRS”) has assigned a provisional rating of Pfd-3 (low) to the Series G Units. 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 July 29, 2013 and is subject to regulatory approval.

One Response to “New Issue: AX FixedReset 5.00%+313”

  1. […] is a FixedReset, 5.00%+313, announced July 18. Note that it is not strictly a “preferred share”, it is a trust unit, and that it pays […]

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