/NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE
TORONTO, Feb. 25, 2013 /CNW/ - Morguard North American Residential Real
Estate Investment Trust (the "REIT") (TSX: MRG.UN) announced today that
it has reached an agreement with a syndicate of underwriters co-led by
RBC Capital Markets and TD Securities, with RBC Capital Markets acting
as bookrunner (collectively, the "Underwriters"), to issue to the
public, subject to regulatory approval, on a bought deal basis,
8,270,000 trust units (the "Units") at a price of $11.50 per Unit
representing gross proceeds of $95,105,000 and $60,000,000 aggregate
principal amount of 4.65% convertible unsecured subordinated debentures
due March 30, 2018 (the "Debentures", collectively with the Units the
"Offering"). The Debentures are convertible at the option of the
holder, into trust units of the REIT at $15.50 per trust unit.
As part of the transaction, Morguard Corporation has agreed to purchase
approximately $10 million of the Units being offered, being 870,000
Units, at the offering price and $5 million aggregate principal amount
of the Debentures. Morguard Corporation currently holds an approximate
57.0% effective interest in the REIT through ownership of Units and
Class B LP Units. After the offering Morguard Corporation will hold an
approximate 48.8% effective interest in the REIT through ownership of
Units and Class B LP Units.
The net proceeds from the Offering will be used to partially fund the
acquisition of 3,752 multi-family residential units in the U.S. for
gross consideration of US$457.8 million, as previously announced on
January 9, 2013, and for general trust purposes. The Offering is not
conditional upon the closing of such acquisition.
The REIT will, by March 1, 2013, file with the securities commissions
and other similar regulatory authorities in each of the provinces and
territories of Canada, excluding Quebec, a preliminary short form
prospectus relating to the issuance of the Units and the Debentures.
Closing of the Offering is expected to occur on or about March 15,
The Units and the Debentures have not been, nor will they be, registered
under the United States Securities Act of 1933, as amended, and may not
be offered, sold or delivered, directly or indirectly, in the United
States or to, or for the account or benefit of, "U.S. persons" (as
defined in Regulation S under the United States Securities Act of 1933,
as amended). This press release does not constitute an offer to sell or
a solicitation of an offer to buy any of the Units or the Debentures in
the United States or to, or for the account or benefit of, U.S.
About Morguard North American Residential REIT
The REIT is an unincorporated, open-ended real estate investment trust
established under the laws of the Province of Ontario. It trades on
the Toronto Stock Exchange under the ticker symbol MRG.UN. With a
strategic focus on the acquisition of high-quality multi-unit
residential properties in Canada and the United States, the REIT
maximizes long-term unit value through active asset and property
management. Its portfolio consists of 7,408 residential suites (as of
February 19, 2013) located in Ontario, Alberta, Louisiana and Florida,
with an IFRS value of approximately $997 million.
Certain information in this press release may constitute forward-looking
statements that involve a number of risks and uncertainties, including
statements regarding the previously disclosed acquisition and the
outlook for the REIT's business results of operations. Forward-looking
statements use the words "believe," "expect," "anticipate," "may,"
"should," "intend," "estimate" and other similar terms, which do not
relate to historical matters. Such forward-looking statements involve
known and unknown risks and uncertainties and other factors that may
cause the actual results to differ materially from those indicated.
Such factors include, but are not limited to, general economic
conditions, the availability of new competitive supply of commercial
real estate that may become available either through construction or
sublease, the REIT's ability to maintain occupancy and to lease or
re-lease space on a timely basis at current or anticipated rates,
tenant bankruptcies, financial difficulties and defaults, changes in
interest rates, changes in operating costs, the REIT's ability to
obtain adequate insurance coverage at a reasonable cost and the
availability of financing. The REIT believes that the expectations
reflected in forward-looking statements are based on reasonable
assumptions; however, the REIT can give no assurance that actual
results will be consistent with these forward-looking statements.
Except as required by applicable law, the REIT disclaims any intention
or obligation to update or revise any forward-looking statements
whether as a result of new information, future events or otherwise.
Readers should be cautioned not to place undue reliance on the
SOURCE: Morguard North American Residential Real Estate Investment Trust
For further information:
K. (Rai) Sahi
Chief Executive Officer
Chief Financial Officer