FrontView REIT secures $75 million convertible preferred investment

FrontView REIT (NYSE: FVR) announced it entered into an agreement for a $75 million delayed-draw convertible perpetual preferred equity investment led by Maewyn Capital Partners.

The investment involves Series A convertible perpetual preferred stock with a 6.75% annual dividend yield payable quarterly in cash. The dividend rate will increase after the fourth anniversary of the final draw if the shares remain outstanding.

Holders can convert the preferred shares into common stock at $17.00 per share at any time. After two years from the final draw, FrontView can force conversion if the volume-weighted average price exceeds 17.5% above the conversion price for 30 consecutive trading days.

The company can redeem the preferred shares at par after the third anniversary of the final draw. Upon redemption, FrontView will issue warrants to holders at $17.00 per share with a five-year term. The preferred shares do not include make-whole provisions commonly found in convertible securities.

FrontView expects to use the capital to fund approximately $100 million in acquisitions during 2026 of properties with frontage on high-traffic roads. The company projects the investment will add approximately 3% to adjusted funds from operations per share when fully deployed, assuming a 7.25% capitalization rate on acquisitions.

Maewyn will appoint one representative to FrontView's board of directors. Charles P. Fitzgerald, Maewyn's founder and managing partner, will serve as the initial designee. A separate Maewyn affiliate owns 944,064 shares of FrontView common stock, representing 3.4% of outstanding shares.

The agreement requires all capital to be called within one year. J.P. Morgan Securities, Morgan Stanley, and Wells Fargo Securities served as financial advisors to FrontView, while BofA Securities and Santander US Capital Markets advised Maewyn.

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