Chartwell Seniors Housing REIT
TSX : CSH.UN

Chartwell Seniors Housing REIT

September 17, 2009 16:19 ET

Chartwell Seniors Housing Real Estate Investment Trust Announces Unit Financing of $75.0 MM

MISSISSAUGA, ONTARIO--(Marketwire - Sept. 17, 2009) -

NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE SERVICES

Chartwell Seniors Housing Real Estate Investment Trust ("Chartwell") (TSX:CSH.UN) announced today that it has agreed to sell, subject to regulatory approval, 12,500,000 Units for $6.00 per Unit for aggregate gross proceeds of $75,000,000 to a syndicate of underwriters led by RBC Capital Markets on a bought-deal basis. Chartwell has granted the underwriters an option (the "Underwriters Over-allotment Option"), exercisable in whole or in part up to 30 days after closing, to purchase up to an additional 15% of the Units issued on the same terms as set forth above.

Chartwell will, within the next few days, file with the securities commissions and other similar regulatory authorities in each of the provinces of Canada, a preliminary short form prospectus relating to the issuance of the Units. Closing of the offering is expected to take place on or about October 8, 2009.

The net proceeds from the Unit offering will be utilized by Chartwell to enhance its financial strength and flexibility in order to take advantage of restructuring opportunities relating to certain existing mezzanine financing investments with third party borrowers, including Spectrum, Melior and others. Possible restructuring alternatives may include the assumption, through foreclosure or otherwise, on a selective basis, of some or all of these borrowers' ownership interests in new and currently operating seniors housing properties. Chartwell currently has $83.4 million of mezzanine financing investments outstanding on 40 separate mezzanine loans with Spectrum, Melior and others that are secured by these borrowers' ownership interests in 29 facilities. These predominantly independent supportive living facilities contain approximately 3,500 suites located across Canada.

Brent Binions, President and Chief Executive Officer of Chartwell stated, "Converting mezzanine financing investments to ownership interests, where appropriate, is expected to increase Chartwell's control over its assets and construction facility re-financings, reduce senior management time directed to mezzanine financing workouts, add high quality, well located properties to Chartwell's industry leading portfolio, and in each instance, be accretive upon stabilization of any facility in which an ownership interest is assumed. These initiatives are core to Chartwell's strategy of owning and operating high quality seniors housing facilities, while delivering stable and growing returns to unitholders."

Vlad Volodarski, Chief Financial Officer of Chartwell stated, "Assumptions of ownership interests by Chartwell, if any, are expected to occur through the assumption of existing construction financing and set off or settlement of mezzanine financing, with minimal or no initial cash payments to the borrowers. The assumption of any ownership interests may require an equity injection by Chartwell upon the refinancing of assumed construction facilities and a funding of cash flow deficiencies, if any, during remaining lease-up periods."

Prior to the deployment of the net proceeds as set forth above, the net cash proceeds will be used by Chartwell to reduce the entire amount currently outstanding under its secured revolving operating credit facility ($27.0 million), with the remainder of the net proceeds to be retained as cash on hand and used by Chartwell for general trust purposes, including, if opportunities arise, to delever its financial position.

Chartwell intends to make monthly cash distributions to Unitholders of record on each record date, on or about the 15th day of the month following the record date. Chartwell's current monthly cash distribution is $0.045 per Unit, representing an approximate yield of ()% to an investor. The first cash distribution to which purchasers of the Units under this offering will be entitled to participate will be for the month of October, with a record date of October 31, 2009 and a payment date of November 15, 2009.

This press release is not an offer to sell, or a solicitation of an offer to buy, any securities. The securities referred to in this press release have not been and will not be registered under the U.S. Securities Act of 1933, as amended and may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act of 1933.

Chartwell is a real estate investment trust focused on generating sustainable, stable and growing cash distributions from owning and managing a complete range of seniors housing communities. It is one of the largest participants in the North American seniors housing business. Chartwell's aim is to capitalize on the strong demographic trends present in its markets to maximize the value of its existing portfolio of seniors housing facilities, and prudently avail itself of opportunities to grow internally and through accretive acquisitions.

This press release contains forward-looking information that reflects the current expectations of management about the future results, performance, achievements, prospects or opportunities for Chartwell and the seniors housing industry. These statements generally can be identified by use of forward-looking words such as "may", "will", "expect", "estimate", "anticipate", "believe", "project", "should" or "continue" or the negative thereof or similar variations. Forward-looking statements are based upon a number of assumptions and are subject to a number of known and unknown risks and uncertainties, many of which are beyond Chartwell's control that could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking statements.

While we anticipate that subsequent events and developments may cause our views to change, we do not have an intention to update this forward-looking information, except as required by applicable securities laws. This forward-looking information represents our views as of the date of this press release and such information should not be relied upon as representing our views as of any date subsequent to the date of this document. We have attempted to identify important factors that could cause actual results, performance or achievements to vary from those current expectations or estimated expressed or implied by the forward-looking information. However, there may be other factors that cause results, performance or achievements not to be as expected or estimated and that could cause actual results, performance or achievements to differ materially from current expectations. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those expected or estimated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. These factors are not intended to represent a complete list of the factors that could affect us. See "Risks and Uncertainties" in our MD&A and risk factors highlighted in materials filed with the securities regulatory authorities in Canada from time to time, including but not limited to our most recent annual information form.

Additional information on Chartwell Seniors Housing REIT is available on Chartwell's web site at: www.chartwellreit.ca or is available at www.sedar.com.

Contact Information

  • Chartwell Seniors Housing REIT
    Mr. Brent Binions
    President and CEO
    (905) 501-4703
    (905) 501-9107 (FAX)
    bbinions@chartwellreit.ca