RE:RE:RE:Not Remotely concernedWrong. Press release does not say new Q series bonds will replace old series bonds, it says it's for "repayment of outstanding indebtedness and for general trust purposes." Outstanding indebtedness is new short-term debt, not repaying existing mortgages. If it was renewing an existing mortgage, they would just renew the existing mortgage with the bank just lke you renew your home mortgage, not create a new $400M bond series.
H&R Announces $400 MM Senior Unsecured Debenture Financing
Canada NewsWire
TORONTO, June 9, 2020
TORONTO, June 9, 2020 /CNW/ - H&R Real Estate Investment Trust ("H&R REIT" or "H&R") (TSX: HR.UN) is pleased to announce an offering (the "Offering") of $400 million principal amount of Series Q senior unsecured debentures (the "Series Q Debentures"). The Series Q Debentures are being offered on an agency basis by a syndicate of agents co-led by CIBC World Markets Inc. and Scotia Capital Inc., and including BMO Capital Markets, TD Securities Inc. and National Bank Financial Inc. These debentures will carry a coupon rate of 4.071% and will mature on June 16, 2025. The Offering is expected to close on or about June 15, 2020. It is a condition of closing that a final rating by DBRS of BBB (high) be obtained.
H&R intends to use the net proceeds of the Offering for the repayment of outstanding indebtedness and for general trust purposes.
The Offering of the Series Q Debentures is being made under H&R REIT's existing short form base shelf prospectus dated March 6, 2020. The terms of the Offering of the Series Q Debentures will be described in a prospectus supplement to be filed with Canadian securities regulators.
SeekAlpha81 wrote: I agree it's not a 25 dollar stock but I think you're missing a few key points. I'm guessing by interest you mean dividend yield, and yes it is around 6pct. The important thing to note is the dividend will be easily covered by incoming net profit. These other Reits may be dipping into debt in order to maintain their dividend. I think H&R took the right approach and when things stabilize they can look like heroes, eventually safely doubling the dividend from here. Most important to note is the loss was a paper loss, if you understand accounting they wrote down the value of their properties. The loss isn't because they didn't collect enough rent to cover their obligations. The debenture also isn't there in order to "cover losses", just like your mortgage renews every few years, they have obligations that do as well. I'm impressed at their ability to raise capital in these crazy times.
GLTA!