Allied Properties Real Estate Investment Trust has announced a $450 million green bond offering through a private placement across Canada. The Series K senior unsecured debentures will bear an interest rate of 4.808% per annum and mature on February 24, 2029. This issuance is part of Allied's Green Financing Framework, reflecting the company's commitment to sustainability and responsible financial management.

Funding Green Projects

The proceeds from the green bond will be allocated to finance or refinance Eligible Green Projects. A significant portion will repay the $250 million construction loan for Allied's 19 Duncan Street project in Toronto, a building designed to achieve LEED Gold certification. The remaining funds will be used to refinance $200 million in Series C unsecured debentures set to mature on April 21, 2025. Allied highlighted the environmental significance of 19 Duncan, underscoring its sustainable design and green building standards.

Strengthening Financial Strategy

This green bond offering aligns with Allied's strategic goals to reduce variable-rate debt and extend its debt maturity profile. Additionally, the move will increase the company's pool of unencumbered properties from 83% to 87%, enhancing financial flexibility. The debentures were sold at par, with Scotiabank, RBC Capital Markets, and CIBC Capital Markets acting as co-leads, and BMO Capital Markets and TD Securities participating in the transaction. Subject to customary closing conditions, the offering is expected to close on February 24, 2025.

Market Response and Credit Rating

The Series K debentures have received a BBB rating with a Negative trend from Morningstar DBRS, ranking equally with Allied's other unsecured debts. Although Allied intends to allocate the funds as outlined, any deviation will not constitute an Event of Default under the Series K Indenture.

Legal Note:

These securities have not been registered under the U.S. Securities Act of 1933 and are not available for sale in the United States.