TORONTO, July 27, 2015 /CNW/ - InnVest Real Estate Investment Trust ("InnVest") (TSX:INN.UN) announced today that it has completed the refinancing of the Fairmont Palliser Calgary, Alberta for a new 10-year $82.5 million mortgage at a fixed interest rate of 4.0% with a U.S. financial institution. This financing replaces the existing mortgage on the hotel that carried an interest rate of 5.3%.
In addition, approximately $20 million of mortgages on three hotels maturing in the third quarter of 2015 have been repaid and the hotels have been added as additional security to the REIT's operating line, increasing the availability under this facility by a similar amount. A further nine hotels with current mortgage debt of $19 million will be added to the REIT's operating line in August 2015, increasing the availability under this facility to $100 million
"Consistent with our strategy, we continue to capitalize on the current low interest rate environment to strengthen our balance sheet and extend our average term to maturity. A key objective is to appropriately finance our properties with a view to lower costs, reduce overall debt and diversify the lender pool," commented Drew Coles, President and Chief Executive Officer. "Looking ahead, we have approximately $96 million, in long-term debt on seven hotel properties maturing through the balance of 2015 with a weighted average interest rate of 5.3%. We expect to refinance this short-term debt with conventional mortgages at lower interest costs, further enhancing our cash flows and maturity profile," Mr. Coles concluded.
InnVest Real Estate Investment Trust is an unincorporated open-ended real estate investment trust which owns a portfolio of 109 hotels across Canada representing over 15,000 guest rooms operated under internationally recognized brands. InnVest also holds a 50% interest in Choice Hotels Canada Inc., one of the largest franchisors of hotels in Canada.
InnVest's units and convertible debentures trade on the Toronto Stock Exchange (the "TSX") under the symbols INN.UN, INN.DB.E, INN.DB.F and INN.DB.G.
FORWARD LOOKING STATEMENTS
Statements contained in this press release that are not historical facts are forward-looking statements. These forward-looking statements include statements with respect to InnVest's assumptions and intentions for refinancing. These forward-looking statements are based on current expectations of management and involve risks and uncertainties which could cause actual results to differ materially from those expressed in the forward-looking statements. Among the key factors that could cause such differences are InnVest's capital requirements and available sources of funds, changes to InnVest's business strategy (including InnVest's ability to divest of assets for expected proceeds; achievement of plans to develop an optimal asset portfolio through completion of acquisitions and reinvestments in the portfolio; ability to achieve and maintain lower debt leverage target; and achieve return expectations on acquisitions and capital investments completed); and real estate investment risks. These and other factors are discussed in InnVest's annual information form, which is available at www.sedar.com. Although management of InnVest believes that the expectations with respect to such forward-looking statements are reasonable, such forward-looking statements are subject to known and unknown risks and uncertainties and, accordingly, there can be no assurance that such expectations will prove to be correct. Readers are cautioned that the foregoing list is not exhaustive. The forward-looking statements included herein are made as of the date hereof and InnVest disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required to do so by applicable securities law.
SOURCE InnVest Real Estate Investment Trust
For further information: Denise Achonu, Vice President, Finance, Tel: (416) 607-2333, Website: www.innvestreit.com