On November 28, 2006, Chartwell Seniors Housing Real Estate Investment Trust completed a public offering of 3,676,475 trust units at a price of $13.60 per unit for aggregate gross proceeds of approximately $50 million and $125 million aggregate principal amount of 6.0 per cent convertible unsecured subordinated debentures due December 1, 2011 to a syndicate of underwriters led by RBC Dominion Securities Inc. On November 30, 2007, the underwriters exercised the over-allotment option in respect of 551,470 additional trust units at a price of $13.60 per unit for additional gross proceeds to Chartwell of approximately $7.5 million.
The transaction was notable in that the final prospectus was filed on October 31, 2006, just hours before the federal Minister of Finance announced drastic changes to the taxation of income trusts. This threw the market into turmoil and, ultimately, led to the Chartwell offering being downsized and repriced. It also led to the need to carry out an $80 million bridge financing facility with Royal Bank of Canada on a convertible debenture basis on November 9, 2006 in order to fund a previously committed acquisition, which was to have been funded from the closing of the public offering. Similarly, it was also necessary for Chartwell to complete a private placement of 7,352,941 trust units at a price of $13.60 per unit on November 30, 2006 for total gross proceeds of approximately $100 million to make up for the reduced size of the public offering. As a result of the completion of the offering of trust units and debentures, the exercise of the over-allotment option and the completion of the private placement, the aggregate gross proceeds of the financing transactions was approximately $282.5 million.
Chartwell was represented by Borden Ladner Gervais LLP with a team led by Paul A.D. Mingay and including Gordon G. Raman, Dyana McLellan, Paul A. Simon, Alexandria Sjöman (corporate/securities), Craig J. Webster and Elinore J. Richardson (tax), and Bruce Fowler and Dan McNamara (financial services). Chartwell was also represented by Skadden, Arps, Slate, Meagher & Flom LLP with a team led by Christopher W. Morgan and including Sally D. Whitehead (US corporate/securities), and Moshe J. Kushman and Vanja Habekovic (US tax).
The underwriters were represented by Osler, Hoskin & Harcourt LLP with a team led by Christopher Murray with David Hanick and Julie Cordeiro (securities), Rodney Davidge (real estate), Judith Harris and Kim Wharram (Canadian tax), William Corcoran and Paul Seraganian (US tax) and Jason Comerford (US securities).