Resolution 2 is to approve a US$137 million loan from the sponsor to MUST for six years at an interest rate of 7.25%, paid quarterly to the sponsor with an exit premium of up to 21.16%. The total interest payable to the sponsor by MUST works out as US$89.4 million including the exit premium, or about 10% a year.
The manager, sponsor and 12 lenders of Manulife US REIT (MUST) have come up with a formula to save the REIT but will need the cooperation of its independent unitholders.
For unitholders, the choice is between survival and liquidation. To survive, unitholders will have to vote for three ordinary resolutions on Dec 14. Resolution 1 is to approve the sale of Park Place in Arizona to the sponsor for US$98.7 million ($131.47 million). The price is based on the higher of two valuations made in June. Manulife, the REIT’s sponsor, owns 9.8% of MUST.
