AX.PR.G Declines On Good Volume

Artis Real Estate Investment Trust has announced:

that it has closed its previously announced public offering (the “Financing”) of Cumulative Rate Reset Preferred Trust Units, Series G (the “Series G Units”) on a bought deal basis through a syndicate of underwriters led by RBC Capital Markets and CIBC (the “Underwriters”). Artis issued and sold an aggregate of 3,200,000 Series G Units (inclusive of 200,000 Series G Units issued pursuant to the partial exercise of the Underwriters’ option) at a price of $25.00 per Series G Unit for gross proceeds to Artis of $80,000,000.

DBRS Limited assigned a rating of Pfd-3 (low) to the Series G Units.

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

AX.PR.G 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 interest and return of capital (see comments), not dividends. The issue will be tracked by HIMIPref™ but relegated to the Scraps index on credit concerns.

The DBRS rating of Pfd-3(low) is now official. As was the case with Friday’s closing of PPL.PR.A, I don’t believe the price decline has anything to do with the specifics of the issue, or should be taken as an indication that the underwriters got it wrong … it’s just a crummy environment right now for low-quality FixedResets.

AX.PR.G traded 219,520 shares today in a range of 24.24-70 before closing at 24.66-69, 18×50. Vital statistics are:

Maturity Type : Limit Maturity
Maturity Date : 2043-07-29
Maturity Price : 22.99
Evaluated at bid price : 24.66
Bid-YTW : 4.91 %

2 Responses to “AX.PR.G Declines On Good Volume”

  1. adrian2 says:

    Note that it is not strictly a “preferred share”, it is a trust unit, and that it pays interest, not dividends.

    As per

    Taxation is complicated: “Artis’ income and net taxable gains for the purposes of the Tax Act will be allocated to the holders of Units and Preferred Units in the same proportion as the distributions received by such holders.” In 2011, Unitholder distributions were 100% return of capital and this was also the case in 2010.

  2. jiHymas says:

    Quite right – I have corrected the post.


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