CAPREIT Announces Increase to Previously Announced Bought Deal Equity Offering to $425 Million
/NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE SERVICES/
TORONTO, Nov. 19, 2019 /CNW/ - (TSX:CAR.UN) – Canadian Apartment Properties Real Estate Investment Trust ("CAPREIT" or the "REIT") announced today that due to strong demand, the size of the previously announced equity offering in connection with which it entered into an agreement to sell to a syndicate of underwriters led by RBC Capital Markets has increased, on a bought deal basis, to 7,930,000 units at a price of $53.60 per unit for gross proceeds of approximately $425 million (the "Offering"). CAPREIT has granted the underwriters an over-allotment option (the "Over-Allotment Option"), exercisable in whole or in part up to 30 days after closing of the Offering, to purchase up to an additional 1,189,500 units to cover over-allotments, if any. If the Over-Allotment is exercised in full, the gross proceeds would increase to approximately $489 million.
CAPREIT will, within the next few days, file with the securities commissions and other similar regulatory authorities in each of the provinces and territories of Canada, a preliminary short form prospectus relating to the issuance of the units. Closing of the Offering is expected to occur on or about December 6, 2019.
CAPREIT intends to use the net proceeds of the Offering:
i. | to finance the REIT's acquisition of approximately $194 million of unencumbered multi-residential properties; |
ii. | to repay approximately $127 million of the REIT's acquisition and operating facility, which was used to fund $88 million of recently closed unencumbered acquisitions and the acquisition of $39 million of Irish Residential REIT shares; |
iii. | to finance approximately $14 million to exercise existing operating lease buyouts, converting two Toronto properties to traditional fee simple property interests; and |
iv. | the remainder, if any, to finance future acquisitions in CAPREIT's robust pipeline, to fund intensification opportunities within CAPREIT's existing portfolio, for revenue-enhancing capital expenditures, and for general trust purposes. |
The above use of proceeds are described in more detail in CAPREIT's press release dated November 18, 2019.
CAPREIT intends to make monthly cash distributions to unitholders of record on each record date, on or about the 15th day of the month following the record date. CAPREIT's current monthly cash distribution is $0.1150 per unit ($1.38 annually). The first cash distribution to which purchasers of the units under this Offering will be entitled to participate will be for the month of December, with a record date of December 31, 2019 and a payment date of January 15, 2020.
This press release shall not constitute an offer to sell, or the solicitation of an offer to buy, any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities being offered have not been and will not be registered under the U.S. Securities Act of 1933 as amended and may not be offered or sold in the United States absent registration or pursuant to applicable exemption from registration.
ABOUT CAPREIT
CAPREIT is a growth-oriented investment trust managing 63,907 suites and sites across Canada, the Netherlands, and Ireland. It owns interests, directly in Canada, and indirectly in the Netherlands through its investment in ERES, a total of 60,241 residential units, comprising 48,566 residential suites and 72 manufactured home communities comprising 11,675 sites, all located in and near major urban centres. CAPREIT is a 2019 AON-Hewitt Best Employer in Canada. For more information about CAPREIT, its business and its investment highlights, please refer to our website at www.caprent.com or www.capreit.net, and our public disclosure which can be found under our profile at www.sedar.com.
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS
All statements in this press release that do not relate to historical facts constitute forward-looking statements. These statements represent CAPREIT's intentions, plans, expectations and beliefs and are subject to certain risks and uncertainties, including that the Q4 Acquisitions do not close, the projected net operating income for the Closed Acquisitions and for the Q4 Acquisitions on which the cap rates cited are based on is not achieved, that could result in actual results differing materially from these forward-looking statements. These risks and uncertainties are more fully described in regulatory filings that can be obtained on SEDAR at www.sedar.com.
SOURCE Canadian Apartment Properties Real Estate Investment Trust (CAPREIT)
CAPREIT, Mr. Michael Stein, Chairman, (416) 861-5788; CAPREIT, Mr. Mark Kenney, President & CEO, (416) 861-9404; CAPREIT, Mr. Scott Cryer, Chief Financial Officer, (416) 861-5771