In the news release, NorthWest Healthcare Properties Real Estate Investment Trust Announces $150 Million Bought Deal of Trust Units, issued 23-Jul-2019 by NorthWest Healthcare Properties Real Estate Investment Trust over CNW, we are advised by the company that "million" should be removed after $150,096,000 in the first paragraph. The complete, corrected release follows:
NorthWest Healthcare Properties Real Estate Investment Trust Announces $150 Million Bought Deal of Trust Units
/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES ./
TORONTO , July 23, 2019 /CNW/ - NorthWest Healthcare Properties Real Estate Investment Trust ("NorthWest" or the "REIT") (NWH-UN.TO) announced today a public offering, on a "bought deal" basis, of 12,720,000 trust units (the "Units") at a price of $11.80 per Unit representing gross proceeds of approximately $150,096,000 (the "Offering"). The Offering is being made through a syndicate of underwriters led by RBC Capital Markets and BMO Capital Markets.
The REIT has also granted the underwriters the option to purchase up to an additional 1,908,000 Units to cover over-allotments, if any, exercisable in whole or in part anytime up to 30 days following closing of the Offering.
The REIT intends to use the net proceeds of the Offering to repay approximately $120 million of high-cost corporate debt (including the REIT's 7.25% convertible unsecured subordinated debentures maturing October 31, 2019 with an outstanding balance of $38.75 million ) with a weighted average interest rate and term to maturity of 7.7% and 1.0 years, respectively. The remainder of the net proceeds will be used to complete the previously announced acquisitions of a German medical office building and a rehabilitation hospital for a combined purchase price of approximately $61.5 million (€41.0 million) at a weighted average stabilized capitalization rate of 5.8%. The acquisitions will be funded with new property mortgages totaling $37.8 million (€25.2 million) at a weighted average interest rate of 1.8%, proceeds from the Offering and the REIT's existing resources, noting that the acquisition of the medical office building closed on July 5, 2019 and the acquisition of the rehabilitation hospital is expected to close in August 2019 , subject to customary closing conditions.
The Offering and the use of proceeds would have reduced NorthWest's consolidated leverage as at Q1 2019 of 54.5% by 220bps to approximately 52.2%. The REIT reiterates its medium-term (9-12 months) consolidated leverage target of 50% as it sees opportunity to continue to strengthen its balance sheet and capital structure through the repayment of further high-cost corporate debt with continued capital recycling activities.
"We are pleased to continue to deliver on our stated strategy of reducing leverage" commented Paul Dalla Lana , Chief Executive Officer of NorthWest. "Additionally, given the cost of the debt that will be repaid, the REIT is pleased to be able to de-leverage while avoiding any material dilution to its AFFO per unit."
The Offering is subject to normal regulatory approvals, including approval of the Toronto Stock Exchange, and is expected to close on or about July 31 , 2019.
The Units will be offered pursuant to the REIT's base shelf prospectus dated October 19, 2018 . The terms of the Offering will be described in a prospectus supplement to be filed with securities regulators in all provinces and territories of Canada and may also be offered by way of private placement in the United States .
The securities offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
About NorthWest Healthcare Properties Real Estate Investment Trust
NorthWest Healthcare Properties Real Estate Investment Trust (NWH-UN.TO) (NorthWest) is an unincorporated, open-ended real estate investment trust established under the laws of the Province of Ontario . The REIT provides investors with access to a portfolio of high quality international healthcare real estate infrastructure comprised of interests in a diversified portfolio of 169 income-producing properties and 13 million square feet of gross leasable area located throughout major markets in Canada , Brazil , Europe , Australia and New Zealand . The REIT's portfolio of medical office buildings, clinics, and hospitals is characterized by long term indexed leases and stable occupancies. With a fully integrated and aligned senior management team, the REIT leverages over 180 professionals across nine offices in five countries to serve as a long term real estate partner to leading healthcare operators.
This press release contains "forward-looking statements" within the meaning of applicable securities laws, including statements about the Offering and the proposed use of proceeds thereof, and the targeted leverage levels post completion of the Offering. The forward-looking statements in this news release are based on certain assumptions, including without limitation that all conditions to completion of the Offering will be satisfied or waived. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations, including the risk that the Offering will not be completed on the terms proposed, or at all or that other developments may arise that result in the REIT having to further increase its leverage. The statements in this news release are made as of the date of this release. Although the REIT believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and, accordingly, readers are cautioned not to place undue reliance on such statements due to the inherent uncertainty therein. A discussion of the risk factors applicable to the REIT is contained under the heading "Risk Factors" in the REIT's annual information form dated March 15, 2019 , a copy of which may be obtained on the SEDAR website at www.sedar.com.
SOURCE NorthWest Healthcare Properties Real Estate Investment Trust
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