Investors checked out of Canadian hotel group Four Seasons ( FS ) Monday after the company announced a $200 million convertible debt offering. In reaction to the announcement, shares of the upscale Canadian hotel chain fell 1.2% as investors fear the dilutive affect of the company's fund raising efforts. The company has a market cap of $2.06 billion. In a brief statement, Four Seasons said the senior notes could be converted into limited voting shares in "specific circumstances," but did not specify what the funds would be used for. Shares fell 70 cents to $57.50, having closed Friday near their 52-week high of $59.83 But news of the debt deal, which was underwritten by Morgan Stanley, should not be a surprise to investors. On March 17, the company filed with the Securities and Exchange Commission to offer up to $250 million in debt securities from time-to-time in one or more offerings. The debt offering comes as the entire hotel industry is on the verge of a powerful cyclical recovery. Already, occupancy rates are rising, which could lead to higher room prices, especially at the luxury end that Four Seasons serves. Signs are already emerging that the company is poised to outperform. On May 6, Four Seasons, which announces results in Canadian currency, announced first-quarter net earnings of $11.5 million, or 31 cents a share, up sharply from last year, when the company lost $9.3 million, or 27 cents a share. On an adjusted basis, Four Seasons earned $7.7 million, or 21 cents a share, easily topping the 15-cent Wall Street estimate and the year-ago adjusted profit of $2.5 million, or 7 cents a share.