An RPI Unit is egX Canada's new security structure designed specifically for revenue-generating real estate issuers. RPI Units have a number of unique features:

• They allow for the efficient distribution of cash to unitholders
  
  
• They have the ability to provide a secured interest in the assets of the issuer
  
  
• They have the features and voting rights typical of common shares

An RPI Unit consists of a share of an issuer and a segregated interest in a debt security. The RPI Unit will trade as a “bundled” or “stapled” security (i.e. the share and debt security will not be separate securities), unless the debt security is fully repaid. RPI Units will trade on egX Canada in the same manner as traditional equity issuances, providing liquidity to unit-holders.


RPI Units can provide unitholders with a secured interest in the real estate assets of the issuer. The debt security component of the RPI Unit is a debt instrument which will allow for the registration of a charge against the real estate assets of the issuer in order to ensure the unitholders’ priority over any subsequent charges or encumbrances. This feature of the RPI Unit will be very attractive to investors looking for security in their investment as well as cash flow and capital appreciation.


We expect that the share component of an RPI Unit will consist of a common share of the issuer, or a share of a preferred class, which may have certain preferences on liquidation, dividend distribution, etc. egX wants to provide issuers with maximum flexibility in designing attractive investment instruments.

egX Canada wants to provide issuers with maximum flexibility in designing attractive investment instruments, and would therefore consider the listing of other classes of shares, such as preferred shares, etc.


This component of the RPI Unit serves three main purposes:

• Provides a flexible mechanism for the distribution of interest to unitholders
  
  
• Provides unitholders with a registered charge against the assets of the issuer
  
  
• Secures priority over any subsequent charges or encumbrances over the real estate assets - to protect investor interests

Issuers will have flexibility in determining the mechanism for the distribution of cash to unitholders. This may be done by:

• Fixed or variable interest
  
  
• Return of principal on the debenture component
  
  
• Dividend payments on the share component

	RPI Unit Issuer	REIT Issuer
Issuer Structure	An RPI Unit structure represents the next generation of real estate securities. An RPI Unit is a bundled security or stapled product comprised of a share of the issuer together with a segregated interest in a debt security registered over the asset of the issuer for the benefit of the unitholders. Also provides cash flow.	A REIT is a special purpose trust which relies on special provisions of the Income Tax Act Canada). Securityholders have an interest or right to the cash flow from operations produced from a pool of real estate assets.
Type of Investment or Asset	An RPI Unit issuer is a corporation or entity, which can be used for multiple types of real estate including revenue producing properties (location specific) as well as infrastructure projects and land banks.	Among other things, REITs typically invest in shopping malls, office buildings, apartments, warehouses and hotel across geographic locations forming a pool of properties, which could be compared to a mutual fund of properties.
Securities	RPI Units are real estate securities that trade like equities on egX.	REITs are trust structures and their securities trade like equities on an exchange
Income Distribution	Flexible capital distribution to unit-holders: Return of invested capital Dividend distribution Payments of interest (pursuant to the debt security portion of the RPI Unit)	Must distribute 95% of income to unitholders
Investor Protection	The debt security is registered against the assets of the issuer for the benefit of the unitholders.	No direct security registered against the assets of the issuer.
Tax Implication	Tax-efficient at corporate level – does not rely on special provisions of the Income Tax Act (Canada).	REITs receive special tax considerations and are typically taxed at the unitholder level.

Download egX Canada's RPI Unit brochure



For more information contact:

Sean Curley
Senior Listings Analyst

Tel: 604-622-1033
Email: SCurley@egXCanada.com