ANN today, sounds like good news for RATRubicon America Trust...

ANN today, sounds like good news for RAT

Rubicon America Trust (ASX: RAT) – Sale of GSA I Portfolio for US$515.0 million
Rubicon America Trust (ASX:RAT) announces that it has entered into a purchase and sale
agreement (PSA) with UrbanAmerica to acquire the GSA I portfolio, a 14 property portfolio
covering 3.1 million square feet, for US$515.0 million.
The sale is conditional upon the completion of due diligence and assumption of the
US$389.0 million senior debt. As part of the completion of the transaction, RAT will
subscribe for US$30.0 million of preferred equity in UrbanAmerica’s dedicated ownership
vehicle. The sale is projected to close on 15 September 2008.
The sale price is approximately US$6.3 million higher than the revaluation of the portfolio as
at 30 June 2008 (refer to RAT ASX release dated 30 June 2008: “Update on asset
valuations and financing arrangements”) and is projected to generate net sale proceeds of
approximately US$90.0 million, as set out below:
US$M
Sale proceeds 515.01
Less:
Property related secured debt 389.0
Transaction costs (including sales commission) 6.0
Gross sale proceeds 120.0
Less: Preferred equity contribution from RAT
(see below)
30.0
Net sale proceeds 90.0
1. Original purchase price was US482.0 million, excluding acquisition costs
It is anticipated that the net proceeds, after providing for taxes payable, will be applied to
reduce RAT’s overall borrowing.
Key terms of the preferred equity are as follows:
Amount US$30.0 million
Return 10% current plus 2% accrued (payable at
end of term)
Amortization 25% of cashflow in excess of debt service
and Return to preferred equity
Term 3 years, but can be repaid at anytime with
60 days notice
Extension options Two x 1 year extensions subject to 1%
fee