Dream Impact amends convertible debenture terms

Executive Summary

• Dream Impact Trust has reached an agreement with Fairfax Financial Holdings Ltd. to extend and amend the terms of its 5.50% convertible unsecured subordinated debentures due July 31, 2026.
• The amendments include extending the maturity date to July 31, 2031, increasing the interest rate to 6.50%, and adjusting the conversion price to $2.75 per unit, with a new cash settlement option for conversions.
• Concurrently, the Trust announced the appointment of Derrick Lau as Chief Financial Officer, effective September 19, 2025, replacing Meaghan Peloso in that specific role while she remains CFO of the asset manager.

Key Details

• Debt Extension: Maturity date extended from July 31, 2026, to July 31, 2031.
• Interest Rate Adjustment: Increased from 5.50% to 6.50%.
• Conversion Terms:
  • New conversion price set at $2.75 per unit.
  • The Trust now has the sole option to satisfy conversion requests in cash instead of issuing units, aimed at reducing potential dilution.
• Counterparty: All debentures are beneficially owned by controlled affiliates of Fairfax Financial Holdings Ltd.
• Approval Conditions:
  • Requires approval by a majority of votes cast at a special meeting of unitholders (expected in fall of this year).
  • Requires approval from the Toronto Stock Exchange and other customary closing conditions.
  • Requires consent from holders of not less than 66-2/3rds per cent of the outstanding debentures; Fairfax has agreed to consent.
• Shareholder Support: Dream Unlimited Corp. holds 6,852,681 units (37% of issued and outstanding units) and has agreed to vote in favor of the amendments.
• Effective Date: Expected to be effective in late 2025 or early 2026, subject to conditions.
• Management Change: Derrick Lau appointed as Chief Financial Officer of the Trust, effective September 19, 2025.
• Outgoing Role: Meaghan Peloso steps down as CFO of the Trust but continues as CFO of Dream (the asset manager), providing strategic support.

Notable Quotes

• "We are extremely pleased to announce the extension of the debentures as this was a significant debt maturity for the trust in 2026 and the new cash settlement option on a conversion reduces potential dilution down the road," said Meaghan Peloso, chief financial officer of Dream Impact.
• "Over the past six years, since joining the trust's management team, Meaghan has done an outstanding job in leading the financial planning and reporting function of the trust through a more challenging economic backdrop for real estate," said Amar Bhalla, chair of Dream Impact.