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BSR REIT grosses US$135M in IPO

BSR Real Estate Investment Trust raised gross proceeds of US$135.0 million in its IPO of 13.5 million trust units.

The units began trading on the Toronto Stock Exchange under the HOM.U ticker May 18.

The offering comes with a 30-day overallotment option for the underwriters to acquire up to 2,025,000 additional units at US$10.00 apiece, which would boost the aggregate gross proceeds to about US$155.3 million if fully exercised.

The multifamily REIT used the net proceeds to repay about US$122.3 million of debt and to finance transaction expenses.

In line with the offering, the REIT indirectly purchased a 48-property portfolio of multifamily residential properties across five bordering states in the U.S. Sunbelt region. It aims to use any net proceeds from the overallotment option for CapEx on the initial portfolio, debt repayment or future acquisitions.

The syndicate of underwriters for the IPO was led by BMO Capital Markets, and included CIBC Capital Markets, RBC Capital Markets, Scotiabank, TD Securities Inc., National Bank Financial Inc., Raymond James Ltd., Canaccord Genuity Corp., Desjardins Securities Inc., Industrial Alliance Securities Inc. and Echelon Wealth Partners Inc.

In addition, BSR plans to make its first distribution of 5.91 U.S. cents per unit on July 16, with the subsequent monthly distributions of an estimated 4.17 cents per unit expected to be made starting on or about Aug. 15.

Goodmans LLP is acting as Canadian counsel to the REIT, with Mitchell Williams Selig Gates & Woodyard PLLC serving as its U.S. counsel.

Blake Cassels & Graydon LLP is serving as Canadian counsel for the underwriters, with Greenberg Traurig LLP acting as their U.S. counsel.