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KEYreit completes C$20 million offering of convertible debentures

Date Closed

December 11, 2012

Lead Office



20.00 Million CAD

On December 11, 2012, KEYreit ("KEYreit") announced that it had closed its previously announced offering of C$20 million convertible unsecured subordinated debentures due December 31, 2017 (the "Debentures").

The Debentures were offered through a syndicate of underwriters co-led by National Bank Financial Inc. and BMO Capital Markets, including Canaccord Genuity Corp. Dundee Securities Ltd., GMP Securities L.P. and Macquarie Capital Markets Canada Ltd.

The Debentures will pay interest at a rate of 7% payable in equal semi-annual payments in arrears on June 30 and December 31 in each year commencing on June 30, 2013, with the initial interest payment accrued from December 11, 2012 up to, but excluding, June 30, 2013.

The Debentures are convertible into fully paid and non-assessable units of KEYreit at a conversion price of C$8.00 per unit subject to adjustment upon the occurrence of certain events, at the holders' option at any time prior to the close of business on the earlier of December 31, 2017 and the business day immediately preceding the date fixed for redemption. The conversion price is equivalent to a ratio of 125.000 units per C$1,000 principal amount of Debentures.

KEYreit will redeem on December 19, 2012 (the "Redemption Date") all of its 7.15% convertible unsecured subordinated debentures due December 31, 2012 (the "7.15% Debentures") in accordance with their terms. The redemption price will be paid in cash and will include $1,000 plus accrued and unpaid interest of C$33.69 for each C$1,000 principal amount of the 7.15% Debentures outstanding on the Redemption Date, to but excluding the Redemption Date. Interest on the 7.15% Debentures will cease to accrue and be payable from and after the Redemption Date. The REIT expects that the 7.15% Debentures, will be halted at the opening of business on December 19, 2012 and delisted at the close of business on December 19, 2012.

KEYreit, headquartered in Toronto, is a small-box retail property owner.

McCarthy Tétrault LLP represented National Bank Financial, the underwriter, with a team led by Andrew Armstrong.