Royal Host Inc.
TSX : RYL
TSX : RYL.DB.B
TSX : RYL.DB.C
TSX : RYL.DB.D

Royal Host Inc.

October 31, 2013 12:29 ET

Royal Host Inc. Announces the Successful Amendment of the Terms of Its Series D Debentures Due June 30, 2014 and Its Series B Debentures Due October 31, 2015

HALIFAX, NOVA SCOTIA--(Marketwired - Oct. 31, 2013) - At serial meetings of its Series D and Series B Debentureholders, Royal Host Inc. (the "Company") (TSX:RYL) (TSX:RYL.DB.D) (TSX:RYL.DB.C) (TSX:RYL.DB.B) today obtained the approval of certain amendments to the Company's Series D and Series B Debentures. At the meetings, 87% of the Series D Debentures voted were in favour of the proposed amendments and 77% of the Series B Debentures voted were in favour of the proposed amendments.

The extraordinary resolution passed by the Series D Debentureholders makes certain amendments to the indenture governing the Series D Debentures, including:

  1. EXTENDING the maturity date for the Series D Debentures from June 30, 2014 to June 30, 2019;
  2. INCREASING the annual interest rate of the Series D Debentures by 0.35 percentage points from 5.90% to 6.25%;
  3. REDUCING the conversion price of the Series D Debentures from $6.19 to $3.50 for each common share of the Company ("Common Shares"), resulting in a conversion rate of 285.7 Common Shares per $1,000 principal amount of the amended Series D Debentures rather than 161.6 Common Shares per $1,000 principal amount of the Series D Debentures; and
  4. REMOVING the provisions related to a change of control of the Company, whereby the debentureholders, upon a change of control, have the right to require the Company to purchase such holder's Series D Debentures at a price equal to 101% of the principal amount.
The extraordinary resolution passed by the Series B Debentureholders makes certain amendments to the indenture governing the Series B Debentures, including:
  1. EXTENDING the maturity date for the Series B Debentures from October 31, 2015 to October 31, 2020;
  2. INCREASING the annual interest rate of the Series B Debentures by 0.25 percentage points from 6.0% to 6.25%;
  3. REDUCING the conversion price of the Series B Debentures from $4.76 to $3.50 for each Common Share, resulting in a conversion rate of 285.7 Common Shares per $1,000 principal amount of the amended Series B Debentures rather than 210.1 Common Shares per $1,000 principal amount of the Series B Debentures; and
  4. REMOVING the provisions related to a change of control of the Company, whereby the debentureholders, upon a change of control, have the right to require the Company to purchase such holder's Series B Debentures at a price equal to 101% of the principal amount.

Consistent with TSX policy, the increase in the interest rate on the Series D Debentures will be effective December 31, 2013 and the increase in the interest rate on the Series B Debentures will be effective April 30, 2014. All other proposed amendments will be effective on signing of the seventh (for Series D Debentures) and eighth (for Series B Debentures) supplemental indentures by the Company and Computershare Trust Company of Canada, which is anticipated to occur within several business days.

There are currently $29,160,000 Series D Debentures outstanding and $23,982,000 Series B Debentures outstanding.

The Series D Debentures will be referred to as the 6.25% Series D Convertible Unsecured Subordinated Debentures due June 30, 2019 and, subject to regulatory approval, will trade on the TSX under the symbol "RYL.DB.D". The Series B Debentures will be referred to as the 6.25% Series B Convertible Unsecured Subordinated Debentures due October 31, 2020 and, subject to regulatory approval, will trade on the TSX under the symbol "RYL.DB.B".

Forward Looking Statements

This press release may contain certain forward-looking statements relating, but not limited to, the

Company's operations, anticipated financial performance, business prospects, and strategies. Forward- looking information typically contains statements with words such as "anticipate", "does not anticipate", "believe", "estimate", "forecast", "intend", "expect", "does not expect", "could", "may", "would", "will", "should", "budgeted", "plan" or other similar terms and expressions suggesting future outcomes. Such forward-looking statements are subject to risks, uncertainties, and other factors, which could cause actual results to differ materially from further results expressed, projected or implied by such forward-looking statements. Readers are therefore cautioned that the Company's expectations, estimates and assumptions, although considered reasonable, may prove to be incorrect and readers should not place undue reliance on forward-looking statements.

Forward-looking statements contained herein are not guarantees of future performance and involve certain risks, uncertainties and other factors that are difficult to predict, and could result in the outcome of such events being materially different from those set out in this news release, including, in particular, the terms, timing and success of any debenture amendments and the refinancing or conversion risk associated with the maturity of the debentures. The Company has no intention and undertakes no obligation to update or release any revisions to these forward-looking statements to reflect events or circumstances, unanticipated events or circumstances, or should its estimates or assumptions change, after the date hereof, except as expressly required by law.

About Royal Host Inc.

Royal Host Inc. is a diversified hospitality company. Royal Host currently owns 19 hotels with 2,611 rooms across Canada. Royal Host also owns and operates the Travelodge Canada franchise business which is currently comprised of over 90 hotels across Canada. Royal Host's common shares and convertible debentures are traded on the Toronto Stock Exchange under the trading symbols "RYL", "RYL.DB.B", "RYL.DB.C" and "RYL.DB.D" respectively.

Contact Information

  • Royal Host Inc.
    Michael McFeters
    Chief Financial Officer
    902-470-4500