Closing Of $1.47 Billion Strategic Sale Transaction TORONTO, Oct. 12, 2021 /CNW/ - H&R REIT ("H&R" or the "REIT") (TSX: HR.UN) is pleased to announce that it has closed the transactions previously announced August 3, 2021 involving the 2.0 million sq.ft. Bow office tower located in Calgary, Alberta, and the sale of the 1.1 million sq.ft. Bell office campus (the "Bell Campus") located in Mississauga, Ontario, for combined gross proceeds of approximately $1.47 billion.
As part of the transaction, the REIT has issued notices of redemption for the Bow Centre Street Limited Partnership Series B and Series C Secured Bonds for a combined redemption amount of $524 million, inclusive of pre-payment penalties, to be redeemed on October 18th, 2021. The REIT has also repaid $25 million of mortgages secured by the Bell Campus, inclusive of pre-payment penalties, while another $97 million of associated mortgage debt was assumed by the buyer.
Net proceeds after the above noted debt repayments, assumptions and associated transaction costs, are approximately $800 million which will be used to pay down debt.
H&R intends to redeem all of its outstanding 2.923% Series L Senior Unsecured Debentures due May 6, 2022 (the "Series L Debentures") in an aggregate principal amount of $325 million pursuant to and subject to the terms of its trust indenture dated February 3, 2010, as supplemented by the tenth supplemental trust indenture dated November 7, 2016 (collectively, the "Indenture").
The Series L Debentures will be redeemed as at the redemption date (expected to be in mid-November 2021) upon payment by H&R of a redemption amount equal to the Canada Yield Price (as defined in the Indenture), together with accrued and unpaid interest to but excluding the redemption date, less any applicable withholding taxes.
Notice of the redemption will be delivered to the trustee, BNY Trust Company of Canada and to the Canadian Depository for Securities Limited as holder of the Series L Debentures in accordance with the terms of the Indenture.
Thomas Hofstedter, President & CEO of H&R REIT said "We are pleased to conclude this transformational transaction, which along with further strategic initiatives management expects to announce in the near future, form the basis for a significant repositioning of H&R REIT."
Monthly Distribution Declared
H&R today declared a distribution for the month of October scheduled as follows:
| Distribution/Unit | Annualized | Record date | Distribution date |
October 2021 | $0.0575 | $0.690 | October 22, 2021 | November 5, 2021 |
Conference Call and Webcast
Management will host a conference call to discuss the financial results for H&R REIT on Friday, November 12, 2021 at 9.30 a.m. Eastern Time. Participants can join the call by dialing 1-888-510-2507 or 1-289-514-5065. For those unable to participate in the conference call at the scheduled time, it will be archived for replay beginning approximately one hour following completion of the call. To access the archived conference call by telephone, dial 1-647-362-9199 or 1-800-770-2030 and enter the passcode 3504623 followed by the pound key. The telephone replay will be available until Friday, November 19, 2021 at midnight.
A live audio webcast will be available through https://www.hr-reit.com/investor-relations/#investor-events. Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast. The webcast will be archived on H&R's website following the call date.