First Capital REIT To Issue $300 Million in Debentures
First Capital REIT To Issue $300 Million in Debentures
Retail Landlord To Use Proceeds To Pay Down More Expensive Floating-Rate Debt
One of Canada’s largest retail real estate investment trusts is issuing $300 million in unsecured debentures and plans to use the proceeds to pay down costlier debt.
First Capital REIT said the debentures are being offered on an agency basis by a syndicate of agents co‐led by RBC Capital Markets, Desjardins Capital Markets and TD Securities. The debentures, which will be issued at par, are at a rate of 5.455% per year and will mature on June 12, 2032, the company said.
The debentures would be direct unsecured obligations of the REIT and will rank equally with all other present and future unsecured and unsubordinated indebtedness. The offering is set to close on June 12.
First Capital, based in Toronto, also issued debentures last quarter to pay down more of its expensive floating-rate debt.
As of March 31, the REIT owned retail property interests in 139 neighbourhoods with 22.2 million square feet of gross leasable area worth $9.2 billion.
Mark Rothschild, an analyst with Canaccord Genuity, said last month the REIT could incur greater interest expenses as it refinances mortgages.
“The rise in long-term interest rates will partially offset organic growth, and in 2024, the REIT has $435 million of debt maturities comprising $134.8 million of mortgages (cost of 3.7%) and $300 million of unsecured debentures (4.7%), representing 13% of total debt (excluding credit facilities),” said Rothschild, in a note on the company.
Source CoStar. Click here to read a full story.
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