Business
H&R Upsizes the Issuance of Bonds Secured by The Bow to $500 million and Announces its Intention to Redeem Outstanding 2013 and 2014 Convertible Unsecured Debentures
TORONTO, May 30, 2012 /CNW/ - H&R Real Estate Investment Trust ("H&R") (TSX: HR.UN;...
About this update from H&r Real Estate Investment Trust
[{"type":"text","content":"\n\n\n\n\n\nTORONTO, May 30, 2012 /CNW/ - H&R Real Estate Investment Trust (\"H&R\")\n (TSX: HR.UN; HR.DB; HR.DB.B; HR.DB.C; HR.DB.D; HR.DB.E) announced today\n the terms on two series of first mortgage bonds secured by The Bow,\n Calgary, Alberta.  The bonds will be issued by Centre Street Trust, a\n wholly owned entity of H&R.  Closing is expected to occur on June 14,\n 2012.\n\n\nThe offering was upsized from $400 million to $500 million and is\n comprised of: (a) $250 million, 9 year term (maturing June 14, 2021),\n semi-annual interest only bonds with an interest rate of 3.690% (the\n \"Series A Bonds\") and (b) $250 million, 10 year term (maturing June 14,\n 2022), semi-annual 30 year amortizing bonds with an interest rate of\n 3.693% (the \"Series B Bonds\" together with the Series A Bonds, the\n \"Initial Bonds\"). The Initial Bonds achieved a provisional rating of A\n by DBRS.\n\n\nOn closing, the Bow will also secure a revolver in favour of certain\n lenders in the amount of up to $300 million (the \"Secured Revolver\").\n The security for the Initial Bonds and the Secured Revolver will rank\n pari passu and are subject to an intercreditor agreement with the\n trustee on behalf of the holders of the bonds.\n\n\nFurther bonds secured by The Bow may be issued from time to time in a\n total aggregate amount including the Secured Revolver not to exceed\n $800 million and shall not exceed $365 million at the end of the\n initial 25 year term of the Encana Lease.\n\n\nH&R intends to utilize the proceeds from the Offering to repay\n indebtedness and for future acquisitions, including financing a portion\n of the recently announced acquisition of a one-third interest in Scotia\n Plaza in downtown Toronto, one of Canada's preeminent office properties\n scheduled to close on June 20, 2012.\n\n\nH&R's proforma debt to fair value after the issuance of the Initial\n Bonds and purchase of Scotia Plaza is expected to be 55.3%.  In terms\n of liquidity, H&R will have cash on hand of approximately $105 million\n and approximately $553 million available from its operating\n facilities.  Assuming the conversion of the 2013 and 2014 convertible\n debentures into units (see below), the proforma debt to fair value will\n decrease to 53.9%.\n\n\nRBC Dominion Securities (as lead agent and sole bookr...