DBRS Rates RioCan REIT’s Preferred Trust Unit Issue Pfd-3 (high)

DBRS has today assigned a new rating of Pfd-3 (high) with a Stable trend to the new $4 million Cumulative Five-Year Rate Reset Preferred Trust Units, Series A (Preferred Units) of RioCan Real Estate Investment Trust (RioCan or the Trust) for total proceeds of $100 million.

The Preferred Units will rank pari passu with every other series and, in the event of liquidation, dissolution or winding-up of the Trust, will rank ahead of RioCan’s trust units in the payment of distributions and return of capital.

The Preferred Unit issue does not have a significant impact on DBRS’s view of RioCan’s financial profile, given the relatively small size of the issue. In addition, the Preferred Unit distribution does not have a material impact on coverage ratios, as the approximately $5.25 million per year fixed charge would only reduce EBITDA-to-fixed charges to 2.29 times from 2.34 times (pro forma Q3 2010).

The net proceeds from this offering will be used by RioCan to enhance its liquidity for property acquisitions, to fund development and for general trust purposes.

Notes:
All figures are in Canadian dollars unless otherwise noted.

The applicable methodology is Rating Real Estate, which can be found on our website under Methodologies.