First Capital REIT is seeking to raise $300 million to pay down debt.

The REIT announced that it has agreed to issue C$300 million of Series B senior unsecured debentures.

“The debentures are being offered on an agency basis by a syndicate of agents co‐led by Desjardins Capital Markets, RBC Capital Markets and TD Securities,” Toronto-based First Capital said in a news release.

First Capital will issue the debentures at par, They will bear interest at a rate of 5.572% per annum and mature on March 1, 2031.

“Inclusive of the benefit of bond forward hedges, the REIT’s all-in interest rate will be 5.481% per annum,” said First Capital. 

The raise attempt coincides with First Capital’s $1-billion portolio optimization plan, which is designed to monetize low-yielding assets, increase short-to-medium-term cash flow from operations and reduce debt.

At last report, First Capital had completed, or agreed to, $633 million of dispositions under the plan, which aims to reach the $1-billion goal by year-end 2024.

First Capital owns, operates and develops grocery-anchored, open-air retail centres across Canada.