Global Real Assets Trust is proposing to issue preferred units in order to reduce or eliminate gating for its current units

Although GRAT (which has over 80% of its NAV invested in illiquid private real estate and infrastructure assets held outside Canada) has suspended cash redemption of its various series of units (the “Units”), it is proposing to issue preferred units (the “Preferred Units”), with the proceeds used in part to implement a “Special Redemption Transaction” under which it would honour redemption requests for Units at a redemption price equal to 100% of the applicable series NAV, subject to specified conditions.

The Preferred Units themselves will have a commercially unattractive quarterly redemption right.

GRAT’s income and net taxable gains for ITA purposes will generally be allocated to the holders of Units and Preferred Units in the same proportion as the distributions received by them. Counsel considers that, although there is risk on the point, s. 104(7.1) of the ITA should not apply.

Neal Armstrong. Summary of Preliminary prospectus of Global Real Assets Trust (“GRAT” or the “Trust”) for issuance of 6.85% cumulative redeemable Series 1 Preferred Units (the “Preferred Units”) under Offerings – REIT, Trust and LP Offerings – Preferred Unit Offerings - MFTs.