BSR Real Estate Investment Trust of Little Rock has announced a bought deal equity offering valued at about $100 million, a transaction the company says will position it for growth by helping to pay down debt and fund acquisitions.
The company (TSX:HOM.U) said it has an agreement with a syndicate of underwriters led by the Toronto-based firms BMO Capital Markets, RBC Capital Markets and CIBC Capital Markets for 5.12 million trust units of BSR at a price of $19.55 per unit.
BSR has also granted the underwriters an option, exercisable at any time, in whole or in part, to purchase up to an additional 768,000 units at the offering price. If exercised in full, it would increase the value of the offering to about $115 million. The option is available for 30 days following the closing of the offering.
Upon completion of the deal, BSR expects to have about $138.3 million of available liquidity through unrestricted cash and borrowing capacity available under its credit facility. Its debt-to-gross book value would be approximately 40.4% including the convertible debentures and 37.8% excluding the convertible debentures.
BSR last month reported full-year and fourth-quarter total portfolio net operating income of $18.7 million and $62.9 million, respectively, and both grew year-over-year.
“We continue to see the positive momentum in multi-residential fundamentals across our target markets and believe the runway for our strategy remains robust,” President and CEO Dan Oberste said in a news release. “The equity offering fortifies our balance sheet and positions the REIT to continue to take advantage of these positive dynamics and execute on our growth plan.”