Not for distribution on U.S. wire services or for dissemination in the United States
HALIFAX, Jan. 16, 2012 /CNW/ - Holloway Lodging Real Estate Investment Trust (TSX: HLR.UN HLR.DB.A) ("Holloway" or the "REIT") announces the terms of the issuance of trust units ("Units") of the REIT to the holders (the "Debentureholders") of its 6.5% convertible unsecured subordinated debentures (the "Debentures").
Holloway previously announced on December 22, 2011 that it would redeem the Debentures in full and that it would satisfy the redemption price of the Debentures by issuing Units in lieu of cash, in accordance with the terms of the trust indenture for the Debentures (the "Indenture"). The number of Units to be issued to Debentureholders is determined by dividing the aggregate principal amount of Debentures outstanding by 95% of the weighted average trading price per Unit for the 20 consecutive trading days ending on the fifth trading day preceding the redemption date (the "Current Market Price"). Based on the redemption date of January 23, 2012, the 20-trading day period commenced on and included December 15, 2011 and ended on and included January 16, 2012.
Based on information available from the TSX website, during this period an aggregate of 10,623,079 Units were traded at an aggregate trading price of $730,528. As a result, the Current Market Price was determined to be approximately $0.069 (rounded) and Units will be issued to Debentureholders at a conversion price of $0.065 (rounded) (being 95% of the Current Market Price). Based on $46,660,000 principal amount of Debentures outstanding, approximately 714,224,023 Units will be issued. However, Holloway will not issue fractional Units on redemption but instead will satisfy fractional Units by a cash payment equal to the Current Market Price for any fractional Unit, which may alter the total number of Units issued.
Units will be issued to registered Debentureholders on January 23, 2012. The Units will be freely-tradeable in Canada and will not be subject to any resale restriction under applicable Canadian securities legislation or the rules of the TSX.
ABOUT HOLLOWAY LODGING REAL ESTATE INVESTMENT TRUST
Holloway is a real estate investment trust focused on acquiring, owning and operating select and limited service lodging properties and a small complement of full service hotels primarily in secondary, tertiary and suburban markets. Holloway owns 19 hotels with 1,881 rooms. Holloway's units and convertible debentures trade on the Toronto Stock Exchange under the symbols HLR.UN and HLR.DB.A, respectively.
This press release contains forward-looking information within the meaning of applicable securities laws. Forward-looking information may relate to the REIT's future outlook and anticipated events or results and may include statements regarding the future financial position, business strategy, financial results and plans and objectives of the REIT, including, in particular, the redemption of the Debentures and the issuance and delivery of Units upon such redemption. In some cases, forward-looking information can be identified by terms such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "predict", "potential", "continue" or other similar expressions concerning matters that are not historical facts. Forward-looking information is subject to certain factors, including risks and uncertainties, that could cause actual results to differ materially from what the REIT currently expects and there can be no assurance that such statements will prove to be accurate. Some of these risks and uncertainties are described under "Risk Factors" in Holloway's annual information form for the year ended December 31, 2010 which is available on the REIT's profile on the SEDAR website at www.sedar.com. The REIT does not intend to update or revise any such forward-looking information should its assumptions and estimates change.
For further information:
Michael Rapps, Chairman and Interim Chief Financial Officer of the REIT at (416) 855-1925.