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American Hotel closes C$201M bought-deal offering

American Hotel Income Properties REIT LP completed its C$200.9 million public bought-deal offering of limited partnership units and its US$48.9 million conversion of unsecured subordinated debentures due June 30, 2022.

The gross proceeds from the offering of 19,410,000 limited partnership units, priced at C$10.35 apiece, includes C$10.9 million generated from a partial exercise of the overallotment option. The underwriters acquired 1,050,000 units of the total 2,754,000 units offered.

The company intends to use the net proceeds to partially fund the potential acquisition of an 18-asset portfolio of Marriott- and Hilton-branded hotels spread across five states. The funds will also be used for working capital, potential future acquisitions and general corporate purposes.

At the same time, the company closed a debt conversion of 5.00% convertible unsecured subordinated debentures, where the underwriters fully exercised their overallotment option for an additional US$6.4 million aggregate principal amount of debentures. The conversion price was US$9.25 per unit, representing a conversion rate of approximately 108.1081 units for each US$1,000 principal amount of debentures.

CIBC Capital Markets and National Bank Financial Inc. co-led the syndicate of underwriters for the offering, while CIBC Capital Markets acted as the sole book runner. Other underwriters included TD Securities Inc., Canaccord Genuity Corp., BMO Capital Markets, Scotiabank, RBC Capital Markets, Haywood Securities Inc. and Industrial Alliance Securities Inc.