Canadian Net closes $4-million debenture placement

Executive Summary

• Canadian Net Real Estate Investment Trust has closed a non-brokered private placement of unsecured convertible debentures, raising $4.0 million in principal amount.
• The debentures mature on December 1, 2030, carry a 7.0% annual interest rate, and are convertible into units at a price of $6.75 per unit.
• Net proceeds will be utilized for acquisitions, transaction costs, repayment of existing credit facility indebtedness, and working capital.

Key Details

• Transaction Structure: Non-brokered private placement of unsecured convertible debentures.
• Principal Amount: $4.0 million.
• Maturity Date: December 1, 2030.
• Interest Rate: 7.0% per annum, payable semi-annually.
• Conversion Terms: Convertible into units of Canadian Net at a conversion price of $6.75 per unit.
• Redemption Rights: Canadian Net may redeem the debentures on or after December 1, 2028, if the closing price of units on the TSX Venture Exchange exceeds the conversion price for 45 consecutive trading days.
• Regulatory Status: Subject to final approval of the TSX Venture Exchange (TSX-V).
• Hold Period: A four-month hold period applies to the convertible debentures and underlying units under Canadian securities laws.
• Use of Proceeds: Acquisitions by Canadian Net, associated transaction costs, repayment of a portion of outstanding indebtedness under credit facilities, costs incurred in connection with the private placement, and working capital/general trust purposes.
• Fees: No finder's fee is payable.

Notable Quotes

• "We are pleased to announce a $4-million convertible debenture financing, which will support Canadian Net's continued growth... This new debenture enhances our financial flexibility and positions us to capitalize on accretive acquisition opportunities while continuing to reinforce the REIT's solid balance sheet." — Kevin Henley, President and Chief Executive Officer