TORONTO,
May 16, 2012 /CNW/ - H&R Real
Estate Investment Trust ("H&R") (TSX: HR.UN; HR.DB; HR.DB.B;
HR.DB.C; HR.DB.D; HR.DB.E) announced today its intention, through
its wholly owned entity Centre Street Trust, to arrange, on a
private placement basis, two series of first mortgage bonds secured
by The Bow, Calgary, Alberta (the
"Initial Bonds" as defined below).
The Initial Bonds (the "Offering") are expected
to be comprised of $200 million, 9
year term, semi-annual interest only bonds (the "Series A Bonds")
and $200 million of semi-annual 10
year term, 30 year amortizing bonds (the "Series B Bonds", together
with the Series A Bonds, the "Initial Bonds"). H&R
intends to utilize the proceeds from the Offering to repay
indebtedness and for future acquisitions. The Initial Bonds
have achieved a provisional rating of A by DBRS.
Term bonds (including the Initial Bonds) secured
by The Bow may be issued from time to time in a total aggregate
amount not to exceed $800 million and
are not permitted to exceed $365
million at the end of the initial 25 year term of the Encana
Lease (the "Term Bonds"). Term Bonds issued by H&R
in excess of $400 million will be
used to permanently reduce amounts available under the Secured
Revolver (defined below), in order to ensure that the $800 million maximum financing secured by The Bow
is not breached.
The Bow also secures a secured revolver in
favour of certain lenders in the amount of up to $400 million (the "Secured Revolver"). The
security for the Term Bonds (including the Initial Bonds) and the
Secured Revolver are pari passu and subject to an intercreditor
agreement with the trustee on behalf of the holders of the Term
Bonds.
The Offering of the Initial Bonds will be led by
RBC Dominion Securities as lead agent and sole bookrunner, together
with CIBC World Markets and TD Securities.
About H&R
H&R is an open-ended real estate investment
trust, which owns a North American portfolio of 40 office, 117
industrial, 133 retail properties comprising over 43 million square
feet, and 3 development projects with a total net book value of
approximately $7.6 billion. The
foundation of H&R's success since inception in 1996 has been a
disciplined strategy that leads to consistent and profitable
growth. H&R leases its properties long term to creditworthy
tenants and strives to match those leases with primarily long-term,
fixed-rate financing.
Forward-looking Statements
Certain information in this news release
contains forward-looking information within the meaning of
applicable securities laws (also known as forward-looking
statements) including, among others, statements relating to the
objectives of H&R, strategies to achieve those objectives,
H&R's beliefs, plans, estimates, and intentions, and similar
statements concerning anticipated future events, results,
circumstances, performance or expectations that are not historical
facts including, in particular, H&R's expectation regarding
future developments in connection with and financial impact of The
Bow. Forward-looking statements generally can be identified
by words such as "outlook", "objective", "may", "will", "expect",
"intend", "estimate", "anticipate", "believe", "should", "plans",
"project", "budget" or "continue" or similar expressions suggesting
future outcomes or events. Such forward-looking statements reflect
H&R's current beliefs and are based on information currently
available to management. These statements are not guarantees of
future performance and are based on H&R's estimates and
assumptions that are subject to risk and uncertainties, including
those discussed in H&R's materials filed with the Canadian
securities regulatory authorities from time to time, which could
cause the actual results and performance of H&R to differ
materially from the forward-looking statements contained in this
news release. Those risks and uncertainties include, among other
things, risks related to: prices and market value of securities of
H&R; availability of cash for distributions; development and
financing relating to The Bow development; restrictions pursuant to
the terms of indebtedness; liquidity; credit risk and tenant
concentration; interest rate and other debt related risk; tax risk;
ability to access capital markets; dilution; lease rollover risk;
construction risks; currency risk; unitholder liability;
co-ownership interest in properties; competition for real property
investments; environmental matters; reliance on one corporation for
management of substantially all H&R's properties; and changes
in legislation and indebtedness of H&R. Material factors or
assumptions that were applied in drawing a conclusion or making an
estimate set out in the forward-looking statements include that the
general economy is stable; local real estate conditions are stable;
interest rates are relatively stable; and equity and debt markets
continue to provide access to capital. H&R cautions that this
list of factors is not exhaustive. Although the forward-looking
statements contained in this news release are based upon what
H&R believes are reasonable assumptions, there can be no
assurance that actual results will be consistent with these
forward-looking statements. All forward-looking statements in this
news release are qualified by these cautionary statements. These
forward-looking statements are made as of today, and H&R,
except as required by applicable law, assumes no obligation to
update or revise them to reflect new information or the occurrence
of future events or circumstances.
Additional information regarding H&R REIT is available at
www.hr-reit.com and on www.sedar.com.
SOURCE H&R Real Estate Investment Trust