Granite REIT Announces C$400 Million Green Bond Offering and Closing of New €70 Million Term Loan

Granite Real Estate Investment Trust (“Granite” or the “REIT”) (TSX: GRT.UN / NYSE: GRP.U) announced today that its wholly owned subsidiary Granite REIT Holdings Limited Partnership (“Granite LP”) has priced an offering (the “Offering”) of C$400 million aggregate principal amount of 6.074% Series 7 senior unsecured debentures due April 12, 2029 (the “Debentures”). The Debentures will be guaranteed by Granite and Granite REIT Inc. The Offering of the Debentures is expected to close on or about October 12, 2023, subject to the satisfaction of certain customary closing conditions. The Debentures are being issued as Granite’s third green bond issuance pursuant to its Green Bond Framework.

The Debentures are being offered on an agency basis by a syndicate of agents co-led by Scotia Capital Inc. and TD Securities Inc. It is a condition of closing that DBRS Morningstar and Moody’s Investor Service, Inc. assign credit ratings of “BBB (high)” with a stable trend or higher, and “Baa2” or higher, respectively, relating to the Debentures.

Granite is making the Offering in Canada pursuant to its base shelf prospectus dated October 1, 2021. The terms of the Offering will be described in a prospectus supplement to the base shelf prospectus to be filed with Canadian securities regulators in each province and territory of Canada and accessible at www.sedarplus.ca.

The Debentures are being issued as Green Bonds under Granite’s Green Bond Framework (the “Framework”) which is available on Granite’s website at https://granitereit.com/sustainability. Granite LP intends to finance or refinance, in whole or in part, expenditures associated with Eligible Green Projects as described in the Framework. Initially and prior to the full allocation, the net proceeds from the Offering will be used to refinance existing debt, including its Series 3 senior unsecured debentures due November 30, 2023 (the “2023 Debentures”) on maturity, and for general corporate purposes. The failure to allocate funds to Eligible Green Projects will not constitute a default under the terms of the Debentures.

Through a cross currency interest rate swap, Granite LP has exchanged the Canadian dollar denominated principal and interest payments for Euro denominated principal and interest payments, resulting in an effective fixed interest rate of 4.9285% for the five and a half-year term of the Debentures.

New €70 Million Term Loan

On September 7, 2023, Granite LP entered into and fully drew upon a €70.0 million senior unsecured non-revolving term facility that matures on September 8, 2026 (the “September 2026 Term Loan”). The September 2026 Term Loan is fully prepayable without penalty. In conjunction with the September 2026 Term Loan, Granite entered into a float to fixed interest rate swap to exchange the floating interest payments from the September 2026 Term Loan for fixed Euro denominated interest payments resulting in an all-in fixed interest rate of 4.3325%. Granite used the net proceeds from the September 2026 Term Loan to fully repay all draws outstanding on Granite’s $1 billion unsecured revolving credit facility with the remainder to be used for general corporate purposes, including to fund development and property acquisitions.