Scott's Real Estate Investment Trust
TSX : SRQ.UN

September 14, 2009 16:34 ET

Scott's Real Estate Investment Trust Announces $20 Million Financing

TORONTO, ONTARIO--(Marketwire - Sept. 14, 2009) -

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES

Scott's Real Estate Investment Trust (TSX:SRQ.UN) ("Scott's REIT") today announced that it has entered into an agreement to sell, on a bought deal basis, $20 million aggregate principal amount of convertible unsecured subordinated debentures due December 31, 2014 (the "Debentures"). The offering is being underwritten by a syndicate of underwriters led by National Bank Financial Inc. and Dundee Securities Corporation.

The Debentures will bear interest at a rate of 7.75 per cent per annum payable semi-annually in arrears on December 31 and June 30, with the initial interest payment on December 31, 2009. Scott's REIT shall have the option to pay such interest either in cash or Units of Scott's REIT ("Units"), subject to regulatory approval.

The Debentures will be convertible at the holder's option into Units at any time during the period beginning on December 31, 2011 and ending on the earlier of the Maturity Date and the business day immediately prior to the date fixed for redemption at a conversion price of $8.04 per Unit (the "Conversion Price"), being a ratio of approximately 124.378 Units per $1,000 principal amount of Debentures. The Debentures will not be redeemable before December 31, 2012. On and after December 31, 2012 and prior to December 31, 2013, the Debentures may be redeemed in whole or in part from time to time at the option of Scott's REIT provided that the volume weighted average trading price for the Units is not less than 125 per cent of the Conversion Price. On and after December 31, 2013 and prior to the Maturity Date, the Debentures may be redeemed in whole or in part from time to time at the option of Scott's REIT at a price equal to their principal amount plus accrued interest. Subject to regulatory approval, Scott's REIT may satisfy its obligation to repay the principal amount of the Debentures on redemption or at maturity, in whole or in part, by delivering that number of Units equal to the amount due divided by 95 per cent of the volume weighted average trading price for the Units, plus accrued interest in cash.

Scott's REIT has also granted the underwriters an over-allotment option to purchase up to an additional $3 million of Debentures. The over-allotment option may be exercised until 30 days following the closing of the offering.

The net proceeds from the offering of Debentures (after deducting the Underwriters' fee and offering expenses) will be used to fund future acquisitions, to reduce outstanding indebtedness and for general business purposes.

The Debentures and the underlying Units have not been and will not be registered under the United States Securities Act of 1933 and accordingly will not be offered, sold or delivered, directly or indirectly within the United States, its possessions and other areas subject to its jurisdiction or to, or for the account or for the benefit of a U.S. person, except pursuant to applicable exemptions from the registration requirements. The offering is subject to normal regulatory approvals including approval of the Toronto Stock Exchange and is expected to close on or about October 2, 2009.

About Scott's Real Estate Investment Trust

Scott's REIT (TSX:SRQ.UN) is Canada's premier small-box retail property owner with 207 commercial properties in seven provinces across Canada. Scott's REIT's properties are well-located and geographically diverse across Canada and nearly all properties are long-term quadruple net leases. The REIT has an approximately 68.9 per cent interest in Scott's Real Estate LP. To find out more about Scott's Real Estate Investment Trust (TSX:SRQ.UN), visit our website at http://www.scottsreit.com.

Forward-looking Statements

This media release contains forward-looking statements. Such statements are based on current expectations that are subject to significant risks and uncertainties that are difficult to predict. Actual results might differ materially from projections suggested in any forward-looking statements due to factors such as the competitive nature of the quick service restaurant industry, the ability of Scott's REIT and Scott's Real Estate LP to execute a growth and development strategy, the reliance of Scott's REIT and Scott's Real Estate LP on key personnel, and risk associated with the structure of income trusts. Scott's REIT assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward-looking statements, except as required by law. Additional information identifying risks and uncertainties is contained in Scott's REIT's filings with the Canadian securities regulators, available at www.sedar.com.

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