Royal Host Real Estate Investment Trust
TSX : RYL.UN
TSX : RYL.DB.B
TSX : RYL.DB.C
TSX : RYL.DB.D

Royal Host Real Estate Investment Trust

September 08, 2010 14:38 ET

Royal Host REIT Announces Normal Course Issuer Bid and Automatic Securities Repurchase Plan for Its 6%, 6.25% and 5.9% Convertible Unsecured Subordinated Debentures

HALIFAX, NOVA SCOTIA--(Marketwire - Sept. 8, 2010) - Royal Host Real Estate Investment Trust ("Royal Host") (TSX:RYL.UN) (TSX:RYL.DB.B) (TSX:RYL.DB.C) (TSX:RYL.DB.D) announced today that the Toronto Stock Exchange ("TSX") has accepted Royal Host's Notice of Intention to make a Normal Course Issuer Bid (the "Bid") to purchase for cancellation, from time to time, as Royal Host considers advisable, (i) its 6% convertible unsecured subordinated debentures with a maturity date of October 31, 2015 ("6% Debentures") (Trading Symbol: RYL.DB.B), (ii) 6.25% convertible unsecured subordinated debentures with a maturity date of September 30, 2013 ("6.25% Debentures") (Trading Symbol: RYL.DB.C) and (iii) 5.9% convertible unsecured subordinated debentures with a maturity date of June 30, 2014 ("5.9% Debentures") (Trading Symbol: RYL.DB.D) (the 6% Debentures, 6.25% Debentures and 5.9% Debentures are collectively referred to as the "Debentures").

As of September 8, 2010, the public float issued and outstanding is $41,634,100 6% Debentures. Royal Host intends to purchase for cancellation up to a maximum of $4,163,000 principal amount of the 6% Debentures (4,163 Debentures), being approximately 10% of Royal Host's public float outstanding on the date hereof, calculated in accordance with the rules of the TSX. As of the date hereof, there was $46,095,000 in aggregate principal amount of the 6% Debentures issued and outstanding.

As of September 8, 2010, the public float issued and outstanding is $50,103,000 6.25% Debentures. Royal Host intends to purchase for cancellation up to a maximum of $5,010,000 principal amount of the 6.25% Debentures (5,010 Debentures), being approximately 10% of Royal Host's public float outstanding on the date hereof, calculated in accordance with the rules of the TSX. As of the date hereof, there was $50,239,000 in aggregate principal amount of the 6.25% Debentures issued and outstanding.

As of September 8, 2010, the public float and the issued and outstanding is $53,327,000 5.9% Debentures. Royal Host intends to purchase for cancellation up to a maximum of $5,332,000 principal amount of the 5.9% Debentures (5,332 Debentures), being approximately 10% of Royal Host's public float outstanding on the date hereof, calculated in accordance with the rules of the TSX. As of the date hereof, there was $53,327,000 in aggregate principal amount of the 5.9% Debentures issued and outstanding.

The price which Royal Host will pay for any Debentures purchased by it will be the prevailing market price of the Debentures on the TSX at the time of such purchase. The actual number of Debentures that may be purchased for cancellation and the timing of any such purchases will be determined by Royal Host.

The Bid will commence on September 10, 2010 and will terminate on September 9, 2011 or such earlier time as the Bid is completed or terminated at the option of Royal Host. The purchases will be effected through the facilities of the Toronto Stock Exchange.

Concurrent with the NCIB renewal, Royal Host has received approval to establish an automatic securities purchase plan (the "Plan") for the Debentures. The Plan was established to provide standard instructions regarding how Royal Host's Debentures are to be repurchased under each issuer bid. Accordingly, Royal Host may repurchase its Debentures under the Plan on any trading day during the issuer bids including during self-imposed trading blackout periods. The Plan will commence immediately and terminate together with each issuer bid. Royal Host may otherwise vary, suspend or terminate the Plan only if it does not have material non-public information and the decision to vary, suspend or terminate the Plan is not taken during a self-imposed trading blackout period. The Plan constitutes an "automatic plan" for purposes of applicable Canadian securities legislation and has been reviewed by the Toronto Stock Exchange.

Management of Royal Host believes that, from time to time, the market price of the Debentures may not fully reflect the underlying value of the Debentures and that at such times the purchase of Debentures would be in the best interests of Royal Host. Such purchases will increase the proportionate interest of, and may be advantageous to, all remaining Debenture holders. In addition, the purchases by Royal Host may increase liquidity to Royal Host's Debenture holders wishing to sell their Debentures.

Royal Host has made purchases of $671,000 of the 6% Debentures, $2,760,000 of the 6.25% Debentures and $673,000 of the 5.9% convertible debentures during the previous 12 months at weighted average prices of $72.83, $82.13 and $69.26, respectively, under previous normal course issuer bids which will expire September 9, 2010. The average daily trading volume of the 6% Debentures, 6.25% Debentures and 5.9% Debentures for six months prior to the date hereof was $18,612, $36,164 and $44,578, respectively.

Royal Host is a uniquely diversified hospitality trust that delivers Unitholder value through hotel ownership, investment and franchising. Royal Host's portfolio of Canadian hotels operates under a variety of recognizable brands as well as a number of unbranded properties.

Royal Host Units and Convertible Debentures are traded on the Toronto Stock Exchange under the trading symbols "RYL.UN", "RYL.DB.B", "RYL.DB.C" and "RYL.DB.D", respectively.

Note on Forward Looking Statements

This press release contains certain forward-looking statements relating, but not limited to, Royal Host's operations, anticipated financial performance, business prospects, and strategies. Forward-looking information typically contains statements with words such as "anticipate", "believe", "expect", "plan", or similar words suggesting future outcomes. Such forward-looking statements are subject to risks, uncertainties, and other factors, which could cause actual results to differ materially from future results expressed, projected, or implied by such forward-looking statements. Such factors include, but are not limited to economic, competitive, and lodging industry conditions. Royal Host disclaims any responsibility to update any such forward-looking statements except as required by law.

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