Calloway Real Estate Investment Trust
TSX : CWT.UN

Calloway Real Estate Investment Trust

April 21, 2008 16:34 ET

Calloway REIT Announces $100 Million Convertible Debenture Offering

TORONTO, ONTARIO--(Marketwire - April 21, 2008) -

NOT FOR DISSEMINATION OVER UNITED STATES NEWSWIRE

Calloway REIT ("Calloway") (TSX:CWT.UN) announced today that it has entered into an agreement to sell, on a bought deal basis, $100,000,000 aggregate principal amount of convertible unsecured subordinated debentures of Calloway (the "Debentures") to a syndicate of underwriters co-led by CIBC World Markets Inc. and RBC Capital Markets. The proceeds from the sale of the Debentures will be used to partially fund the acquisition of six shopping centres from SmartCentres and Wal-Mart Canada Corp. announced on April 9, 2008, to repay debt and for general trust purposes.

The Debentures bear interest at a rate of 6.65% per annum payable semi-annually in arrears on June 30 and December 31 in each year commencing on December 31, 2008, and will mature on June 30, 2013 (the "Maturity Date"). The Debentures will be convertible at the holder's option into units of Calloway (the "Units") at any time prior to the Maturity Date and the date fixed for redemption at a conversion price of $25.25 per Unit (the "Conversion Price"). The Debentures will not be redeemable on or before June 30, 2011. After June 30, 2011 and prior to June 30, 2012, the Debentures may be redeemed in whole or in part from time to time at Calloway's option provided that the volume weighted average trading price for the Units is not less than 125% of the Conversion Price. On and after June 30, 2012 and prior to the Maturity Date, the Debentures may be redeemed in whole or in part from time to time at Calloway's option at a price equal to their principal amount plus accrued interest. Subject to regulatory approval, Calloway 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% of the market price for the units at that time, plus accrued interest in cash.

Calloway has also granted the underwriters the option to increase the offering by an additional $25,000,000 principal amount of Debentures at any point prior to closing of the offering.

The offering is being made under Calloway's base shelf prospectus dated September 21, 2007. The terms of the offering will be described in a prospectus supplement to be filed with Canadian securities regulators.

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 May 2, 2008.

This press release contains "forward looking statements" subject to various significant risks and uncertainties which may cause actual results, performances or achievements of Calloway to be materially different from any future results, performances or achievements expressed or implied by such forward looking statements. Such risk factors include, but are not limited to, risks associated with real property ownership, availability of cash flow, restrictions on redemption, general uninsured losses, future property acquisitions, environmental matters, tax related matters, debt financing, Unitholder liability, potential conflicts of interest, potential dilution, and reliance on key personnel. Calloway cannot assure investors that actual results will be consistent with these forward looking statements and Calloway assumes no obligation to update or revise them to reflect new events or circumstances.

Contact Information

  • Calloway REIT
    Simon Nyilassy
    President and Chief Executive Officer
    (905) 326-6400 ext. 7649
    (905) 326-0783 (FAX)
    or
    Calloway REIT
    Bart Munn
    Chief Financial Officer
    (905) 326-6400 ext. 7631
    (905) 326-0783 (FAX)