Granite REIT Announces a C$300 Million Debenture Offering
Granite Real Estate Investment Trust (“Granite”) (TSX: GRT.UN / NYSE: GRP.U) made a significant announcement regarding a new offering. Its subsidiary, Granite REIT Holdings Limited Partnership, has successfully priced an offering of C$300 million in Series 10 senior unsecured debentures. This offering reflects the commitment of Granite in the financial markets and is aimed at strengthening its financial foundation.
Details of the Offering
The offering of the debentures has been priced to reflect an interest rate based on Daily Compounded CORRA plus 0.77% per year, with payments scheduled quarterly in arrears. Notably, these debentures are set to mature on December 11, 2026. The importance of this issuance is emphasized by the guarantee provided by Granite and Granite REIT Inc., which assures potential investors of the security of their investment.
Syndicate of Agents
A well-coordinated syndicate of agents is managing this offering. The leading firms include Scotia Capital, TD Securities, and Desjardins Securities, ensuring a robust approach to the placement of these debentures. Additionally, the involvement of Morningstar DBRS, which will assign a credit rating of “BBB (high)” with a stable trend or higher, adds credibility to the offering.
Usage of Proceeds
The proceeds from this offering are earmarked for specific essential financial strategies. Granite LP plans to use these funds primarily to repay its C$300 million senior unsecured non-revolving term facility that is maturing on December 11, 2026. Following this, any remaining balance will be directed toward general corporate purposes, enhancing the trust's operational flexibility.
Currency Exchange Strategy
Granite has engaged in a strategic financial maneuver by utilizing an existing cross-currency interest rate swap. This strategy effectively converts the Canadian dollar-denominated principal and interest payments of the debentures into Euro-denominated fixed interest payments, achieving an effective interest rate of 0.27% for the duration of the debentures. This move demonstrates Granite’s proactive approach in managing foreign exchange risk.
About Granite
Granite is recognized as a Canadian-based Real Estate Investment Trust (REIT) with a robust focus on the acquisition, development, ownership, and management of logistics, warehouse, and industrial properties across North America and Europe. The trust has established a substantial portfolio consisting of 143 investment properties, encompassing approximately 63.3 million square feet of leasable area. This extensive presence underscores Granite’s commitment to expanding its operational footprint and enhancing shareholder value.
Accessing Financial Information
For those interested in delving deeper into Granite’s financial performance and additional publicly filed documents, this information is readily accessible via SEDAR+. Investors and analysts can also consult the United States Securities and Exchange Commission’s Electronic Data Gathering, Analysis and Retrieval System (EDGAR) for further insights into the company's operational strategies.
Contact Information
For further inquiries, potential investors or interested parties can visit Granite's website or reach out directly. Teresa Neto, Chief Financial Officer, is available at 647-925-7560, and Andrea Sanelli, Senior Director of Legal & Investor Services, can be reached at 647-925-7504 for additional assistance.
Frequently Asked Questions
What is the purpose of the C$300 million offering?
The offering is primarily aimed at repaying an existing term loan and supporting general corporate purposes.
Who is managing the debenture offering?
A syndicate of agents co-led by Scotia Capital, TD Securities, and Desjardins Securities is managing the offering.
What interest rate will the debentures bear?
The debentures will bear interest at Daily Compounded CORRA plus 0.77% per annum.
When will the debentures mature?
The debentures are set to mature on December 11, 2026.
What financial strategy is Granite utilizing?
Granite is employing a cross-currency interest rate swap to manage currency risk and to secure low interest rates effectively.
