Partners Real Estate Investment Trust
TSX : PAR.UN

Partners Real Estate Investment Trust

November 12, 2015 13:53 ET

Partners REIT Announces $15.0 Million of Second Mortgages and Final Redemption of Its Series I Convertible Debentures

BARRIE, ONTARIO--(Marketwired - Nov. 12, 2015) - Partners Real Estate Investment Trust ("Partners" or the "REIT") (TSX:PAR.UN) is pleased to announce that it has finalized two new second mortgages with a total value of $15.0 million.

A second mortgage with a value of $11.0 million has been secured at Partners' Thunder Centre in Thunder Bay, Ontario, a property that comprises a total of approximately 168,000 square feet. This mortgage carries a twenty-month term, and has an interest rate of 5.5%.

A second mortgage with a value of $4.0 million has been secured at Partners' Mariner Square Shopping Centre in Campbell River, British Columbia, a property that comprises a total of approximately 100,000 square feet. This mortgage carries a two-year term, and has an interest rate of 5.5%.

Both second mortgages mature on the same dates as the first mortgages on the respective properties. At the maturity of these mortgages, management intends to refinance the first and second mortgages at competitive market interest rates for first mortgage financings.

Year-to-date, Partners has complete $33.8 million of new financings, inclusive of refinancing maturing mortgages, at an average rate of 4.17%.

The financings were originated by First National Financial LP, a wholly owned subsidiary of First National Financial (TSX:FN)(TSX:FN.PR.A). Upon completion of the two financings, First National Financial LP and its institutional partners received an aggregate fee of $90,000, and First National Financial LP will also collect fees for servicing the new mortgages. Moray Tawse, a significant unitholder of the REIT, has an interest in First National.

Partners will apply a portion of the proceeds from the second mortgages to redeem the final 25% of its $28,750,000 outstanding in Series 1, 8.0% convertible unsecured subordinated debentures, which are due March 31, 2016 (the "Debentures"). The REIT has issued a notice of such redemption to the holders of the Debentures, and the Debentures will be redeemed on December 15, 2015 in accordance with their terms. The total redemption amount payable for each $1,000 principal amount of Debentures will equal a redemption price of $1,000 plus accrued and unpaid interest of $16.66 up to but excluding the redemption date.

The remaining net proceeds create additional liquidity to fund capital investments intended to improve the overall quality of Partners' portfolio.

"We are pleased to close these financings, thereby providing the full repayment of Partners' 8% Series I convertible debentures," commented Jane Domenico, CEO of the REIT. "As we have stated in the past, our most certain route towards creating unitholder value in the near future is simply to focus on the properties we currently own, placing the best possible tenants within those properties, and providing those tenants with the best possible service. The repayment of this high yield debt lowers our cost of capital and will improve AFFO through the reduction of financing costs."

About Partners REIT

Partners REIT is a growth-oriented real estate investment trust focused on the expansion and management of a portfolio of 36 retail and mixed-use community and neighbourhood shopping centres. These properties are located in both primary and secondary markets across British Columbia, Alberta, Manitoba, Ontario, and Quebec, and comprise a total of approximately 2.5 million square feet of leasable space.

Disclaimer

Certain statements included in this press release constitute forward-looking statements, including, but not limited to, those identified by the expressions "expect", "will" and similar expressions to the extent they relate to Partners REIT. The forward- looking statements are not historical facts but reflect Partners REIT's current expectations regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. Although Partners REIT believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and, accordingly, readers are cautioned not to place undue reliance on such statements due to the inherent uncertainty therein.

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