Brookfield Office Properties Inc. has announced:
that it has agreed to issue to a syndicate of underwriters led by RBC Capital Markets, CIBC, Scotia Capital Inc. and TD Securities Inc., for distribution to the public, ten million Cumulative Rate Reset Class AAA Preference Shares, Series AA (the “Preferred Shares, Series AA”). The Preferred Shares, Series AA will be issued at a price of C$25.00 per share, for aggregate proceeds of C$250 million. Holders of the Preferred Shares, Series AA will be entitled to receive a cumulative quarterly fixed dividend yielding 4.75% annually for the initial period ending December 31, 2019. Thereafter, the dividend rate will be reset every five years at a rate equal to the five-year Government of Canada bond yield plus 3.15%.
Holders of Preferred Shares, Series AA will have the right, at their option, to convert their shares into Cumulative Floating Rate Class AAA Preference Shares, Series BB (the “Preferred Shares, Series BB”), subject to certain conditions, on December 31, 2019 and on December 31 every five years thereafter. Holders of Preferred Shares, Series BB will be entitled to receive cumulative quarterly floating dividends at a rate equal to the 90-day Government of Canada Treasury Bill yield plus 3.15%.
Brookfield Office Properties has granted the underwriters an option, exercisable in whole or in part anytime up to two business days prior to closing, to purchase an additional 1,500,000 Preferred Shares, Series AA at the same offering price. Should the option be fully exercised, the total gross proceeds of the financing will be C$287.5 million.
The Preferred Shares, Series AA will be offered in Canada pursuant to a short form prospectus to be filed with the securities commissions and other similar regulatory authorities in each of the provinces of Canada, pursuant to National Instrument 44-101 – Short Form Prospectus Distributions.
The net proceeds of the issue will be used for general corporate purposes.
They later announced:
that as a result of strong investor demand for its previously announced public offering of 4.75% Cumulative Rate Reset Class AAA Preference Shares, Series AA (the “Preferred Shares, Series AA”), it has agreed to increase the size of the offering from C$250 million to C$300 million with no underwriters’ option, or from 10,000,000 to 12,000,000 Preferred Shares, Series AA.
They look as if they might be a little cheap compared to other BPO FixedResets, but it’s hard to tell.
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Update, 2014-10-21: Rated Pfd-3 [Stable] by DBRS