TORONTO--(BUSINESS WIRE)--Dream Industrial REIT (TSX: DIR.UN) (the “Trust” or “Dream Industrial REIT”) announced today the closing of its previously announced private placement offering of $800 million aggregate principal amount of unsecured debentures (the "Offering") for aggregate gross proceeds to the Trust of $799.8 million consisting of a $200 million re-opening of the 1.662% Series A Debentures maturing in 2025 (the "Series A Debentures"), $200 million of three month Canadian Dollar Offered Rate (CDOR) plus 0.35% Series B Debentures maturing in 2024 (the "Series B Debentures") and $400 million of 2.057% Series C Debentures maturing in 2027 (the "Green Bonds") (collectively, the "Debentures"). The Trust intends to enter into cross currency interest rate swap arrangements to swap the proceeds of the Offering to Euros to lower the effective interest rate on each series of Debentures.
The Series A Debentures, the Series B Debentures and the Green Bonds are expected to be rated BBB with a Stable Trend by DBRS Limited.
The net proceeds of the Offering are expected to be used in part to fund a portion of the purchase price (including adjustments) for the acquisition of shares of a corporation that owns a portfolio of 31 institutional quality, logistics properties across Europe (the “Acquisition”) and, with respect to the net proceeds from the sale of the Green Bonds, will also be used to finance and/or refinance eligible green projects within the meaning of the Trust’s recently announced Green Financing Framework. The Trust may use a portion of the net proceeds to repay existing indebtedness.
If the Acquisition is not completed by August 30, 2021, or upon the occurrence of certain other events, the Series B Debentures and the Green Bonds will be automatically redeemed at 100% of their principal amount plus accrued and unpaid interest to the date of redemption. The Series A Debentures are not subject to automatic redemption in these circumstances and, accordingly, if the Acquisition is not completed as expected, the net proceeds to be received by the Trust from the sale of the Series A Debentures may instead be used for other proposed acquisitions and general trust purposes.
The Debentures have not been and will not be qualified for sale to the public under applicable securities laws in Canada and, accordingly, any offer and sale of the Debentures in Canada will be made on a basis which is exempt from the prospectus requirements of such securities laws. The Debentures will not be listed on any stock exchange and there will be no market for such securities. The Debentures have not been, and will not be, registered under the United States Securities Act of 1933, as amended, or any state securities law and may not be offered or sold in the United States and may not be offered or sold to other persons who are not residents of a province of Canada.
About Dream Industrial Real Estate Investment Trust
Dream Industrial REIT is an unincorporated, open-ended real estate investment trust. As at March 31, 2021, Dream Industrial REIT owns and operates a portfolio of 186 industrial assets (280 properties) comprising approximately 28.8 million square feet of gross leasable area in key markets across North America and a growing presence in strong European industrial markets. Dream Industrial REIT’s objective is to continue to grow and upgrade the quality of its portfolio and to provide attractive overall returns to its unitholders. For more information, please visit www.dreamindustrialreit.ca.
Forward Looking Information
This press release may contain forward-looking information within the meaning of applicable securities legislation. Forward-looking information generally can be identified by the use of forward-looking terminology such as “outlook”, “objective”, “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “should”, “plans”, or “continue”, or similar expressions suggesting future outcomes or events. Some of the specific forward-looking information in this press release may include among other things, our intention to enter into cross currency interest rate swap arrangements; and the expected use of net proceeds of the Offering. Forward looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond Dream Industrial REIT’s control that could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. These risks and uncertainties include, but are not limited to, global and local economic and business conditions; uncertainties surrounding the COVID-19 pandemic; the financial condition of tenants; our ability to finance or refinance eligible green projects; interest and currency rate fluctuations; competition; and the risk that there may be unforeseen events that cause the Trust’s actual capital structure, overall cost of debt and results of operations to differ from what the Trust currently anticipates. Our objectives and forward-looking statements are based on certain assumptions with respect to each of our markets, including that the general economy remains stable, the gradual recovery and growth of the general economy continues over the remainder of 2021, interest rates remain stable, conditions within the real estate market remain consistent, competition for and availability of acquisitions remains consistent with the current climate, the capital markets continue to provide ready access to equity and/or debt, the timing and ability to sell certain properties remains in line with the Trust’s expectations, valuations to be realized on property sales will be in line with current IFRS values, occupancy levels remain stable, and the replacement of expiring tenancies will remain consistent. All forward-looking information in this news release speaks as of the date of this news release. Dream Industrial REIT does not undertake to update any such forward-looking information whether as a result of new information, future events or otherwise except as required by law. Additional information about these assumptions and risks and uncertainties is contained in Dream Industrial REIT’s filings with securities regulators, including its latest annual information form and MD&A. These filings are also available at Dream Industrial REIT’s website at www.dreamindustrialreit.ca.