Canadian rental housing company Tricon Residential Inc. said it is poised to receive a US$300 million preferred equity investment from a syndicate of investors led by Blackstone Real Estate Income Trust Inc.

The investor group agreed to purchase newly created units issued by a Tricon subsidiary in a private placement. The units will be exchangeable for common shares of Tricon at an initial exchange price of US$8.50 per share, which represents a 16% premium to the 30-day volume-weighted average price of Tricon's common stock as of Aug. 26. On an as-exchanged basis, the preferred equity will equate to approximately 14% of the pro forma fully diluted outstanding common shares of Tricon at closing.

Blackstone Real Estate Income will buy US$240 million of the preferred equity. Frank Cohen, chairman and CEO of Blackstone Real Estate Income, will join Tricon's board on the closing date of the investment.

Net proceeds will be used to repay Tricon's corporate credit facility, which will reduce its proportionate leverage by about 500 basis points to roughly 56% net debt/assets.

The investment is slated to close in late August or early September, pending approval from the Toronto Stock Exchange.

Morgan Stanley was Tricon's private placement agent, while Goodmans LLP was its legal adviser. Paul Weiss Rifkind Wharton & Garrison LLP provided Tricon with U.S legal support, while Skadden Arps Slate Meagher & Flom LLP was legal adviser to Morgan Stanley. Simpson Thacher & Bartlett LLP and Davies Ward Phillips & Vineberg LLP were legal advisers to Blackstone Real Estate Income.