Amica Mature Lifestyles Inc.

Amica Mature Lifestyles Inc.

March 08, 2011 16:55 ET

Amica Mature Lifestyles Increases Ownership in Amica at Bayview and Announces Completion of Debt Refinancings

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 8, 2011) - Amica Mature Lifestyles Inc. ("Amica" or the "Company") (TSX:ACC), a leader in the management, marketing, design, development and ownership of luxury housing and services for mature lifestyles, is pleased to announce the acquisition of additional ownership interest in Amica at Bayview and the completion of refinancing for Amica at The Balmoral Club and Amica at Swan Lake.

On March 31, 2011, Amica will complete the acquisition of an additional 51.5% interest in Amica at Bayview (located in North York, ON), bringing the Company's ownership position to 66.5%. Subject to post-closing and accounting adjustments, the purchase price for the acquisition is approximately $20.1 million, including: cash consideration on closing of $7.7 million, and the assumption of the vendors' share of mortgages payable on the property of $12.4 million.

Samir Manji, Amica's Chairman, President and Chief Executive Officer, stated, "We are very excited to add Amica at Bayview to our growing portfolio of consolidated communities as part of our internal consolidation strategy. We anticipate that this flagship luxury retirement residence will be a key, long term contributor to our financial performance and will immediately, upon closing, contribute to strong growth in our revenues, cash flow and funds from operations."

While the Company continues to maintain its brand manager business model, it is simultaneously focusing on increasing its ownership position in some of its mature communities to strengthen its asset base and create long term value for shareholders. The Company will continue to focus on the execution of its plan to increase its ownership position in existing mature Amica communities and evaluate external acquisition opportunities.

Amica at Bayview (completed in July 2003) has a total of 140 suites and is currently at 93.5% occupancy. Based on the in place net operating income, the cap rate on this transaction is approximately 8%. The community has an existing Canada Mortgage and Housing Corporation ("CMHC") insured mortgage in place with an interest rate of 3.39% (matures March 2015).

Selected historical pre-tax financial results for Amica at Bayview for the years ended May 31, 2010 and May 31, 2009 are as follows:

  Amica at Bayview
  Expressed in thousands of Canadian dollars
  Year ended Year ended
  31-May-10 31-May-09
Revenue $7,921 $7,754
Net earnings 1,523 1,616
Cash flow from operations $2,199 $2,272

(1) Figures are before consolidation adjustments.

On February 24, 2011, refinancing for Amica at The Balmoral Club (a 100% Amica owned community) was completed. The property was refinanced for $6.0 million (inclusive of CMHC fees) at an interest rate of 3.46% for a five year term. Proceeds of this mortgage refinancing were used to pay down the Company's demand operating loan which was utilized to pay out the previous $6.8 million Amica at Balmoral Club mortgage (interest rate of 7.84%) which matured in November 2010.

On February 28, 2011, Amica at Swan Lake, a co-tenancy in which the Company has a 50% ownership interest, completed an early repayment of a mortgage having a balance owing of $17.9 million (bearing interest at 6.142%) for $16.5 million. This represented a discount of approximately 8%. Concurrently with the closing of this repayment, Amica at Swan Lake completed the placement of a new $16.5 million loan at an interest rate of prime plus 0.75% (currently 3.75%). The previous mortgage was a 10 year Commercial Mortgage Backed Security from which the mortgagor was seeking an exit. This allowed Amica at Swan Lake to acquire the mortgage at a very attractive discount while simultaneously benefitting from the current interest rate environment to secure a new financing at a significantly lower rate. The new financing is a floating rate 18 month mortgage as the Company and its 50% co-tenancy partner anticipate either submitting an application later this year to secure a CMHC insured mortgage on this property, or new financing in conjunction with an expansion at Amica at Swan Lake.

Art Ayres, Amica's Chief Financial Officer, stated "These refinancings provide a significant reduction in our debt service costs, which will contribute towards improving our cash flow from operations and funds from operations going forward. The Amica at Swan Lake refinancing was particularly attractive in that we not only benefitted from a substantial discount in the price paid for this mortgage, but also dramatically reduced our borrowing cost on the new mortgage secured."

About Amica Mature Lifestyles Inc.

Amica Mature Lifestyles Inc., a Vancouver based public company, is a leader in the management, marketing, design, development and ownership of luxury housing and services for mature lifestyles. There are 25 Amica Wellness & Vitality™ Residences, including three in pre-development. The common shares of Amica are traded on the Toronto Stock Exchange under the symbol "ACC". For more information, visit

Forward-Looking Information

This news release contains "forward-looking information" within the meaning of applicable securities laws ("forward-looking statements").

These forward-looking statements are made as of the date of this news release and the Company does not intend, and does not assume any obligation, to update these forward-looking statements, except as otherwise required by law. Users of forward-looking statements are cautioned that actual results may vary from forward-looking statements contained herein. Forward-looking statements include, but are not limited to, statements regarding the Company's growth prospects; the completion of the acquisition of an additional 51.5% ownership interest in Amica at Bayview; changes in the Company's method of accounting for Amica at Bayview; anticipated financial results including improving cash flow from operations and funds from operations; occupancy levels and operating income; future value for shareholders; and other similar statements concerning anticipated future events, conditions or results that are not historical facts. In certain cases, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". While the Company has based these forward-looking statements on its expectations about future events as at the date that such statements were prepared, the statements are not a guarantee of the Company's future performance and are subject to risks, uncertainties, assumptions and other factors which could cause actual results, performance or achievements to differ materially from future results, performance or achievements expressed or implied by such forward-looking statements. Such factors and assumptions include, amongst others, the effects of general economic and market conditions, actions by government authorities, uncertainties associated with legal proceedings and negotiations and misjudgements in the course of preparing forward-looking statements. In addition, there are known and unknown risk factors which could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Known risk factors include, among others, risks related to: capital markets; cost overruns, delays and start-up losses for new real estate developments; the availability of capital to finance growth or refinance debt as it comes due; the ability of seniors to pay for Amica's services; Amica's ability to attract seniors with its services and keep pace with changing consumer preferences; risks inherent in the ownership of real property; operational risks inherent in owning and operating residences; dependence on the ability of Amica's co-tenancy participants to meet their obligations; interest rate volatility in the marketplace; regulatory changes; job actions including strikes and labour stoppages; possible liability under environmental laws and regulations relating to removal or remediation of hazardous or toxic substances on properties owned or operated by Amica; the risks associated with global events such as infectious diseases, extreme weather conditions and natural disasters; foreign exchange rate volatility; as well as those factors discussed in Amica's Annual Information Form dated August 11, 2010, filed with the Canadian Securities Administrators and available at and in the "Risks and Uncertainties" section of the Company's management's discussion and analysis for the six months ended November 30, 2010 available at Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements, or the material factors or assumptions used to develop such forward looking statements, will prove to be accurate. Accordingly, readers should not place undue reliance on forward-looking statements.

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