Canada’s Allied Properties Real Estate Investment Trust (Allied) has announced a $450 million private placement of series K senior unsecured debentures. The debentures, issued under Allied’s Green Financing Framework, will bear an interest rate of 4.808% per annum and mature on 24 February 2029.
The debentures will be sold at par with a yield of 4.808% per annum and are being offered through a syndicate of agents co-led by Scotiabank, RBC Capital Markets, and CIBC Capital Markets, alongside BMO Capital Markets and TD Securities. Subject to customary closing conditions, the issuance is expected to close on 24 February 2025.
Proceeds from the issuance will be directed toward financing and refinancing Eligible Green Projects, as outlined in Allied’s Green Financing Framework. Prior to allocation, the funds will be used to repay the construction loan on 19 Duncan Street, Toronto (approximately $250 million), with the remainder applied toward repayment of Allied’s series C senior unsecured debentures due 21 April 2025 ($200 million).
The 19 Duncan property comprises 149,230 square feet of office space, 3,570 square feet of retail space, and 464 residential units. The office component, completed in late 2023, is fully leased to Thomson Reuters with a weighted-average lease term of 8.6 years. The residential component, known as “Toronto House,” is set for completion in early 2026 and is pursuing LEED Gold certification.
The repayment of the 19 Duncan construction loan aligns with Allied’s strategy to reduce variable-rate debt and extend debt maturity terms. The move will also increase Allied’s pool of unencumbered properties from 83% to 87%.
The series K debentures are expected to receive a “BBB” rating with a Negative trend from Morningstar DBRS. The bonds will hold the same ranking as all other unsecured debt issued by Allied.
The debentures have not been registered under the United States Securities Act of 1933 and may not be offered or sold in the United States without registration or an applicable exemption. The announcement does not constitute an offer to sell or solicit purchases in jurisdictions where such transactions would be unlawful.
