DBRS Places Primaris Retail Real Estate Investment Trust Under Review with Positive Implications

DBRS has today placed the Issuer Rating of BBB (low) for Primaris Retail Real Estate Investment Trust (Primaris or the Trust) Under Review with Positive Implications following the announcement whereby H&R Real Estate Investment Trust (H&R) will acquire 100% of the issued and outstanding units of Primaris (the Transaction).

Primaris was originally placed Under Review with Developing Implications on December 5, 2012, following the KingSett Capital-led consortium’s announcement of its intention to make an all-cash offer to purchase all of the issued and outstanding trust units of Primaris at a price of $26.00 per unit (an approximate total of $2.5 billion) (please see the December 5, 2012, press release).

DBRS notes that under the proposed Transaction, H&R will acquire all of the issued and outstanding units of Primaris. For each Primaris unit held, Primaris unitholders may elect to receive either $28.00 in cash, subject to a maximum cash component of $700 million, or 1.13 stapled units of H&R, subject to a maximum of 86.5 million in H&R units offered.

In connection with the Transaction, DBRS confirmed the rating of H&R’s Senior Unsecured Debentures at BBB with a Stable trend (please see the January 17, 2013, press release). Since Primaris’ credit profile stands to benefit following a successful completion of the Transaction, DBRS has revised the Trust’s Issuer Rating from Under Review with Developing Implications to Under Review with Positive Implications. The rating will remain Under Review with Positive Implications until DBRS completes a detailed assessment of the implications of this acquisition. DBRS notes that the completion of the Transaction could result in the discontinuation of the Trust’s Issuer Rating.

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

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link to the right under Related Research or by contacting us at info@dbrs.com.

The applicable methodology is Rating Real Estate Entities (April 2011), which can be found on our website under Methodologies.