SmartCentres Real Estate Investment Trust Announces $300 Million Debenture Issue

SmartCentres REIT announced an important development. It has priced a $300 million offering of Series AB senior unsecured debentures. This move is significant for the Trust as it aims to strengthen its finances and improve its position in the competitive Canadian real estate market.

The Series AB debentures have an interest rate of 4.737% and are set to mature on August 5, 2031. This offering is expected to enhance SmartCentres’ portfolio, which includes a variety of retail and office properties across Canada. A group of financial institutions, including Scotiabank, CIBC Capital Markets, Desjardins Securities, RBC Capital Markets, and TD Securities, are managing the offering as joint bookrunners. National Bank Financial, Mizuho Securities, BMO Capital Markets, and Casgrain are acting as co-managers.

The expected closing date for this offering is around February 5, 2025. SmartCentres plans to use the money raised from this debenture issue to refinance existing debt. This includes paying off $160 million in Series N debentures due on February 6, 2025. It also includes repaying its credit line and for general corporate purposes.

Morningstar DBRS has given SmartCentres a provisional credit rating of BBB with a stable outlook for these new debentures. This rating suggests that the Trust is in a good position to meet its financial obligations and remain stable in its operations.

SmartCentres is one of Canada’s largest fully integrated REITs, with a growing mixed-use portfolio that includes 195 strategically located properties. The Trust holds around $11.9 billion in assets and manages 35.3 million square feet of retail and office spaces that generate income. With an impressive occupancy rate of 98.5%, SmartCentres is well-prepared to continue its growth in the market.

The announcement of this debenture issue comes at a time when many investors are looking for stable opportunities in real estate. The Trust’s diverse properties and high occupancy rates make it an attractive option for those looking to invest.

However, the Trust also faces challenges in today’s economy. The real estate market can be affected by various factors, including interest rates, economic growth, and consumer demand. SmartCentres’ proactive approach to its debt will be key. It will help overcome these challenges.

This debenture offering is being made through a private placement to accredited investors across Canada. This offering is not for distribution in the U.S. or via U.S. wire services. The debentures are not registered under U.S. securities laws.