{"id":50450,"date":"2019-06-28T11:17:00","date_gmt":"2019-06-28T15:17:00","guid":{"rendered":"https:\/\/prefblog.com\/?p=50450"},"modified":"2025-10-29T11:20:05","modified_gmt":"2025-10-29T15:20:05","slug":"ax-pr-g-to-be-redeemed","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=50450","title":{"rendered":"AX.PR.G To Be Redeemed"},"content":{"rendered":"

Artis Real Estate Investment Trust has announced<\/a>:<\/p>\n

\n

that it has delivered formal notice to the holder(s) of its Preferred Units, Series G (the \u201cSeries G Units\u201d) that, on July 31, 2019, the REIT will redeem all of the 3,140,300 outstanding Series G Units at a price of $25.3125 (the \u201cRedemption Price\u201d) for each Series G Unit, being $25.00 plus $0.3125 in accrued and unpaid distributions thereon up to but excluding July 31, 2019.<\/p>\n

The Redemption Price will be payable upon presentation and surrender of the Series G Units called for redemption at the corporate trust offices of AST Trust Company (Canada) at 1 Toronto Street, Suite 1200, Toronto, Ontario, M5C 2V6, Attention: Corporate Actions.<\/p>\n<\/blockquote>\n

That was a nice surprise for holders of the issue, as AX.PR.G closed at 25.25, up $4.52 (+21.80%!) on volume of 234,839. <\/p>\n

AX.PR.G is a FixedReset, 5.00%+313, that commenced trading 2013-7-29<\/a> after being announced 2013-7-18<\/a>. Note that it is not strictly a \u201cpreferred share\u201d, it is a trust unit, and that it pays interest and return of capital (see comments), not dividends. The issue has been tracked by HIMIPref\u2122 but relegated to the Scraps – FixedReset (Discount) subindex on credit concerns.<\/p>\n

A hint as to why they did this may be found in a June 3 press release<\/a>:<\/p>\n

\n

Artis Real Estate Investment Trust (TSX: AX.UN) (\u201cArtis\u201d or the \u201cREIT\u201d) provided an update today on its normal course issuer bid (\u201cNCIB\u201d) activity in May 2019.<\/p>\n

During the month of May, Artis has acquired the following number of units through its NCIB:
\n\u2022 1,590,993 trust units at a weighted-average price of $11.24;
\n\u2022 6,800 Series A preferred units at a weighted-average price of $21.96;
\n\u2022 9,800 Series E preferred units at a weighted-average price of $20.56; and
\n\u2022 13,100 Series G units at a weighted-average price of $21.99.<\/p>\n

From November 1, 2018, when the REIT announced its intention to purchase units through its NCIB, to May 31, 2019, Artis has bought back 12,650,364 trust units at a weighted-average price of $10.46, 51,900 Series A preferred units at a weighted-average price of $21.53, 59,600 Series E preferred units at a weighted-average price of $20.09, and 55,000 Series G preferred units at a weightedaverage price of $21.37.<\/p>\n

As of the date hereof, there are 141,283,025 trust units, 3,400,200 Series A preferred units, 3,944,100 Series E preferred units, 3,150,300 Series G preferred units and 5,000,000 Series I preferred units outstanding.<\/p>\n

The REIT has an automatic purchase plan in place which allows for the continuous purchase of units and preferred units under its NCIB, including during normal blackout periods.<\/p>\n<\/blockquote>\n

Their 2018 Financial Report<\/a> discloses:<\/p>\n

\n

The REIT’s weighted-average effective rate at December 31, 2018, on mortgages and other loans secured by properties, inclusive of properties held in joint ty5frgtenture arrangements, was 4.30%, compared to 3.96% at December 31, 2017. The weighted-average nominal interest rate on mortgages and other loans secured by properties, inclusive of properties held in joint venture arrangements, at December 31, 2018, was 4.09%, compared to 3.79% at December 31, 2017.<\/p>\n<\/blockquote>\n

So in terms of cash, they’re not really saving too much by redeeming AX.PR.G at par, given that it would have reset to about 4.50%. But they’re saving a little bit, and 50bp was enough for RioCan to redeem REI.PR.A<\/a> and later, REI.PR.C<\/a>.<\/p>\n

Still, holders of AX.PR.G have just been handed a windfall profit of over $14-million, which is about $0.10 per trust unit outstanding, which compares to a reported profit of $158-million in 2018<\/a>. If I owned the trust units, I’d be ticked off. Why is there such an emphasis on big dramatic moves? What’s wrong with continuing to purchase on the open market at a $4 discount to par, given that the excess financing cost is only about $0.10 – $0.15 per annum? What’s the risk? If you get it wrong, you have another chance to redeem in five years – that’s the beauty of the FixedReset structure – at least, from the issuers’ perspective.<\/p>\n

Sure, it’s slow. So what? Slow and steady wins the race!<\/p>\n","protected":false},"excerpt":{"rendered":"

Artis Real Estate Investment Trust has announced: that it has delivered formal notice to the holder(s) of its Preferred Units, Series G (the \u201cSeries G Units\u201d) that, on July 31, 2019, the REIT will redeem …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"class_list":["post-50450","post","type-post","status-publish","format-standard","hentry","category-issue-comments"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/50450","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=50450"}],"version-history":[{"count":1,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/50450\/revisions"}],"predecessor-version":[{"id":50451,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/50450\/revisions\/50451"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=50450"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=50450"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=50450"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}