Dream Global REITplans to raise roughly C$85.1 million in a bought-deal offering, which it plansto use to fund the acquisition of two office properties in Germany and redeem its5.5% convertible debentures.
The offering of 9,450,000 units is priced at C$9.00 per unit.It also carries a 30-day overallotment option for underwriters to buy up to 1,417,500additional units. If the overallotment is exercised in full, the offering's grossproceeds would total roughly C$97.8 million.
The company expects the offering to close on or about Aug. 5,pending the approval of the Toronto Stock Exchange and other customary conditions.
Dream Global said it is in "exclusive or advanced"talks to buy the German properties for €105.6 million, or C$151.5 million, representingan average going-in cap rate of roughly 7.6% and an AFFO yield of more than 11%.The assets, which cover about 955,800 square feet of gross leasable area in thecompany's target markets in Germany, have a weighted average occupancy of about99% and a roughly 7.8-year average term. The company will fund the acquisitions,which are expected to close in the fourth quarter, in part with the company's ongoingcapital recycling program.
The company expects to close on its purchase of the two assetsduring the fourth quarter.
Dream Global plans to fully redeem its 5.5% convertible unsecuredsubordinated debentures due July 31, 2018, with an aggregate principal amount ofroughly C$161 million. The company will fund the redemption also with net proceedsit expects to raise from planned refinancings of its assets.
If the property acquisitions are not consummated, the proceedsfrom the offering may be used for general trust purposes or future acquisitions.