MISSISSAUGA, ON, Nov. 15, 2021 /CNW/ - Morguard North American Residential REIT (the "REIT") (TSX: MRG.UN) today announced it has closed the CMHC-insured financing on four properties, located in Toronto and Mississauga, Ontario, providing gross mortgage proceeds of $194.2 million, at a weighted average interest rate of 2.72% and for a weighted average term of 10.5 years.
Concurrently, the REIT redeemed the Class C limited partnership units ("Class C LP Units") of Morguard NAR Canada Limited Partnership held by Morguard Corporation ("Morguard"). The Class C LP Units were entitled to priority distributions in satisfaction of financial obligations related to the Retained Debt (defined below) and any associated tax payable by Morguard. The Retained Debt had a mortgage balance at maturity associated with the refinanced properties of $74.2 million at a weighted average interest rate of 3.97%, resulting in net proceeds of $120.0 million, before financing costs and any associated tax payable.
Morguard retained, as primary obligor, the mortgages on four properties ("Retained Debt") that were sold to the REIT and also retained the deferred financing costs associated with the Retained Debt. Morguard remained responsible for the interest and principal payments on the Retained Debt, and the Retained Debt was secured by a charge on each of the properties. As consideration for the Retained Debt, Morguard received Class C LP Units on which distribution payments were made in an amount expected to be sufficient to permit Morguard to satisfy amounts payable with respect to: (i) the principal and interest under the Retained Debt; and (ii) the amount of tax that is due and payable that is reasonably attributable to any distributions on the Class C LP Units.
About Morguard North American Residential REIT
The REIT is an unincorporated, open-ended real estate investment trust established under and governed by the laws of the Province of Ontario. The Units of the REIT trade on the Toronto Stock Exchange under the ticker symbol MRG.UN. With a strategic focus on the acquisition of high-quality multi-suite residential properties in Canada and the United States, the REIT maximizes long-term Unit value through active asset and property management. Its portfolio consists of 13,275 residential suites (as of November 15, 2021) located in Alberta, Ontario, Colorado, Texas, Louisiana, Illinois, Georgia, Florida, North Carolina, Virginia and Maryland with an appraised value of approximately $3.2 billion at September 30, 2021. For more information, visit the REIT's website at www.morguard.com.
SOURCE Morguard North American Residential Real Estate Investment Trust
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