Dundee REIT

Dundee REIT

December 17, 2007 16:15 ET

Dundee REIT to Issue $125 Million in Convertible Debentures

TORONTO, ONTARIO--(Marketwire - Dec. 17, 2007) -


DUNDEE REIT (TSX:D.UN) today announced that it has entered into an agreement to sell to a syndicate of underwriters led by TD Securities Inc. and Scotia Capital Inc., on a bought deal basis, $125,000,000 principal amount of Convertible Unsecured Subordinated Debentures (the "Debentures") with a coupon rate of 6.0% per annum payable semi-annually on June 30 and December 31 commencing on June 30, 2008. In addition, Dundee REIT has granted the syndicate an over-allotment option, exercisable for a period of 30 days following closing, to purchase an additional $18,750,000 of Debentures, which, if exercised, would increase the gross proceeds of the offering to $143,750,000. The Debentures will mature on December 31, 2014 (the "Maturity Date"). The net proceeds of the offering will be used for general trust purposes, including for funding possible future acquisitions. The offering is expected to close on January 14, 2008 and is subject to regulatory approval.

The Debentures will be convertible at the holder's option into REIT Units, Series A of Dundee REIT ("Trust units") at any time prior to the earlier of the Maturity Date and the date fixed for redemption at a conversion price of $41.40 per Trust unit, subject to customary adjustment events (the "Conversion Price"). The Debentures will not be redeemable before December 31, 2010. On and after December 31, 2010 and prior to December 31, 2012, the Debentures may be redeemed in whole or in part from time to time at Dundee REIT's option at a price equal to their principal amount plus accrued and unpaid interest provided that the market price for the Trust units is not less than 125% of the Conversion Price. On and after December 31, 2012, the Debentures may be redeemed at Dundee REIT's option at a price equal to their principal amount plus accrued and unpaid interest. Subject to regulatory approval, Dundee 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 Trust units equal to the amount due divided by 95% of the market price for the units at that time, plus accrued and unpaid interest in cash.

The Debentures 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 in limited circumstances.

Dundee REIT is an unincorporated, open-ended real estate investment trust and provides high quality, affordable business premises. It is focused on owning, acquiring, leasing and managing mid-sized urban and suburban office and industrial properties in Canada. Dundee REIT's portfolio currently consists of approximately 6.3 million square feet of gross leasable area, located primarily in Western Canada. Dundee REIT's portfolio is well diversified by geographic location and tenant mix. For more information, please visit www.dundeereit.com.

Contact Information

  • Dundee Real Estate Investment Trust
    Michael J. Cooper
    Vice Chairman and Chief Executive Officer
    (416) 365-5145
    Email: mcooper@dundeereit.com
    Dundee Real Estate Investment Trust
    J. Michael Knowlton
    President and Chief Operating Officer
    (416) 365-2325
    Email: mknowlton@dundeereit.com
    Website: www.dundeereit.com
    Dundee Real Estate Investment Trust
    Mario Barrafato
    Senior Vice-President and Chief Financial Officer
    (416) 365-4132
    Email: mbarrafato@dundeereit.com