Stocks to WatchMilestone Apartments Real Estate Investment Trust (MST.UN-T) and MileSouth Apartment Portfolio LP said they have reached an agreement with a syndicate of underwriters co-led by BMO Capital Markets and CIBC to sell 9.1-million units of the REIT comprised of 6.9-million units from treasury and 2.185-million units from MileSouth on a bought-deal basis for gross proceeds of $125-million.
The company said it expects that about $60-million of the treasury proceeds from the offering will be used to repay amounts drawn under the REIT’s credit facility which were used to partially fund previous acquisitions, for future acquisitions and for general trust purposes. The remaining treasury proceeds of about $35-million will be used by the REIT to redeem all of the class B limited partnership units of Milestone Multifamily Investors LP held by MileSouth.
Following the redemption of Class B Units, MileSouth will hold no Class B Units. The proceeds from the secondary or over-allotment offering of about $30-million will be paid to MileSouth. The REIT said it will not receive any proceeds from that portion of the offering or the over-allotment option.
Upon completion of the offering, MileSouth will own about 11.8-million units, representing 17.9-per-cent ownership interest in the REIT, down from 26.9 per cent. If the over-allotment option is exercised in full, MileSouth will own about 10.4-million units, representing an 15.8-per-cent ownership interest in the REIT.