RioCan Real Estate Investment Trust is back at it.
For the third time since August, the REIT has tapped the markets for some new money. That’s pretty much a dream scenario for equity desks that are slowly recovering from a horrible quarter for deal making.
RioCan isn’t coming back to the market blindly. The firm keeps financing because it can. Its previous offering, just three weeks ago, was upsized the day of, and then sold through the shoe, raising $127-million in total. That came after the firm sold $125-million of trust units in last August.
The latest deal is $130-million, but this time it's for preferred shares. RioCan issued its first series of these securities back in January, making it the first Canadian REIT to do so. The deal came at a time when a number of firms were experimenting with these securities, whereas historically financial institutions were the main issuers of them.
This latest issue comes at a yield of 4.7 per cent, while the first series paid 5.25 per cent. Government bond yields have dropped much more in that time period.
The new money will be used to refinance and buy back some debentures that pay 5.7 per cent annually. RioCan did the same thing in January when it swapped old 8.33 per cent bonds for new ones that yielded 4.499 per cent.
RBC, CIBC and TD are behind the latest offering. RBC has been the lead in all five of RioCan’s financings this year.