H&R REIT Obtains $425M in Construction Financing and Closes Private Placement of $200M

On April 23, 2009, H&R Real Estate Investment Trust announced that Centre Street Trust, all of the equity interests of which are indirectly owned by the REIT, closed a $425 million, 42-month construction facility for development of “The Bow” in Calgary from a syndicate of lenders led by RBC Capital Markets and TD Securities as arrangers and including, in addition to Royal Bank of Canada and The Toronto-Dominion Bank, The Bank of Nova Scotia, Bank of Montreal, Alberta Treasury Branches and Canadian Western Bank.

On April 24, 2009, the REIT closed a private placement to Fairfax Financial Holdings Limited and affiliates of Fairfax, of $200 million of debentures maturing April 24, 2014 bearing interest at a rate of 11.5 per cent and warrants to purchase up to 28,571,429 Stapled Units at an exercise price of $7.00 per Stapled Unit at any time on or before April 24, 2014.

Blake, Cassels & Graydon LLP acted for the REIT with a team that included William Fung, Leslie Johnson, Eric Moncik, Sheldon Vanderkooy, Matthew Merkley and Sandie Huynh (securities); Jeffrey Trossman and Andrew Spiro (tax); and Peter MacGowan (financial services).

Goodmans LLP acted for the REIT and Centre Street Trust in connection with the construction financing with a team that included Juli Morrow, Andrew Wiseman, James Riley, Howard Wise and Jeffrey Shore.

Macleod Dixon LLP acted as Alberta counsel for the REIT and Centre Street Trust in connection with the construction financing with a team that included Brian Sherman, QC, Andrew Robertson, Robert Housman, Salimah Janmohamed and Michael Bolitho.

Torys LLP acted for Fairfax with a team that included David Chaikof, Amanda Balasubramanian, Thomas Yeo and Patricia Finkelstein (securities and lending); Sabrina Gherbaz (real estate); and Corrado Cardarelli and Catrina Card (tax).

McMillan LLP acted for the arrangers and lending syndicate with a team that included Paul Avis, Cheryl Stacey, Andrea Onn, David Slan, Sivan Nisimov, Paula Bokser and Matthew Potts (in Alberta). EnCana, the tenant of “The Bow,” was represented by a team led by in-house counsel Jeffrey Paulson and by Fraser Milner Casgrain LLP with a team in Toronto and Calgary that included Jillian Shortt, Don Kowalenko and Robert McKinnon (real estate); Stephanie Campbell, William Jenkins and David Mann (financial services); and Lowell Westersund (construction).