/NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE SERVICES/
VANCOUVER, BC, Nov. 26, 2021 /CNW/ - American Hotel Income
Properties REIT LP ("AHIP", or the "Company") (TSX:
HOT.UN) (TSX: HOT.U) (TSX: HOT.DB.U) (TSX: HOT.DB.V) announced
today the completion of its previously announced public offering
(the "Offering") on a bought deal basis of US$50 million aggregate principal amount of 6.00%
convertible unsecured subordinated debentures due on December 31, 2026 (the "Debentures").
The Debentures will commence trading today on the Toronto Stock
Exchange (the "TSX") under the symbol HOT.DB.V.
The Offering was conducted through a syndicate of underwriters
co-led by CIBC Capital Markets and BMO Capital Markets, and
included Canaccord Genuity Corp., TD Securities Inc., National Bank
Financial Inc., RBC Capital Markets, Scotiabank and iA Private
Wealth Inc. AHIP has also granted the underwriters an
over-allotment option to purchase up to an additional US$5 million aggregate principal amount of
Debentures exercisable in whole or in part for a period of 30 days
following closing of the Offering to cover over-allotments, if any,
and for market stabilization purposes.
As described in AHIP's prospectus dated November 22, 2021 which is available on SEDAR at
www.sedar.com (the "Prospectus"), AHIP intends to use
the net proceeds of the Offering, together with cash on hand, to
fund the intended redemption of all of the Company's outstanding
convertible unsecured subordinated debentures due on June 30, 2022, with an aggregate principal
outstanding of US$48,875,000, listed
on the TSX under the trading symbol HOT.DB.U (the "2022
Debentures"). Later today, AHIP will issue a notice (the
"Notice") of redemption to the registered holder of the 2022
Debentures. As set out in the Notice, the redemption date of the
2022 Debentures will be on December 31,
2021 (the "Redemption Date"). The 2022 Debentures are
redeemable for an amount equal to their principal amount plus
accrued and unpaid interest up to, but excluding, the Redemption
Date.
The Debentures are convertible at the option of the holder into
limited partnership units of AHIP (each, a "Unit" or
collectively "Units") at any time prior to maturity at
US$4.95 per Unit (the "Conversion
Price"). The Conversion Price of the Debentures also represents
a conversion rate of approximately 202.0202 Units for each
US$1,000 principal amount of
Debentures, subject to adjustment in accordance with the trust
indenture dated June 9, 2017 (the
"Trust Indenture") and the supplemental indenture dated
November 26, 2021 (the
"Supplemental Indenture") collectively governing the
Debentures, copies of which will be available on SEDAR at
www.sedar.com.
The Debentures bear interest at a rate of 6.00% per annum and
will be payable semi-annually on June
30 and December 31 until
maturity on December 31, 2026, with
the first payment commencing on June 30,
2022. The Debentures will not be redeemable by AHIP prior to
December 31, 2024. On or after
December 31, 2024, but prior to
December 31, 2025, the Debentures
will be redeemable, in whole or in part, at a price equal to par
plus accrued and unpaid interest, at AHIP's option, provided that
the volume-weighted average trading price of the Units on the TSX
is not less than 125% of the Conversion Price. On and after
December 31, 2025 and prior to the
maturity date, the Debentures will be redeemable, in whole or in
part, at a price equal to par plus accrued and unpaid interest, at
AHIP's option.
This news release shall not constitute an offer to sell or a
solicitation of any offer to buy nor shall there be any sale of the
securities in any jurisdiction in which such offer, solicitation or
sale would be unlawful. The securities being offered have not been,
nor will they be, registered under the United States Securities Act
of 1933, as amended (the "U.S. Securities Act"), and such
securities may not be offered or sold within the United States absent registration under
the U.S. Securities Act or an applicable exemption from the
registration requirements thereunder.
ABOUT AMERICAN HOTEL INCOME PROPERTIES REIT LP
American Hotel Income Properties REIT LP (TSX: HOT.UN, TSX:
HOT.U, TSX: HOT.DB.U, TSX: HOT.DB.V), or AHIP, is a limited
partnership formed to invest in hotel real estate properties across
the United States. AHIP's 78
premium branded, select-service hotels are located in secondary
metropolitan markets that benefit from diverse and typically stable
demand. AHIP's hotels operate under brands affiliated with
Marriott, Hilton, IHG and Choice Hotels through license
agreements. The Company's long-term objectives are to
increase the value of its hotel properties through operating
excellence, active asset management and investing in value-added
capital expenditures, expand its hotel portfolio through selective
acquisitions on an accretive basis and increase unitholder value
and distributions to unitholders. More information is available at
www.ahipreit.com.
FORWARD-LOOKING INFORMATION
Certain statements contained in this news release may constitute
forward-looking information as defined under applicable securities
laws. Forward-looking information is often, but not always,
identified by the use of words such as "anticipate", "plan",
"expect", "may", "will", "intend", "should", and similar
expressions. Forward-looking information involves known and unknown
risks, uncertainties and other factors that may cause actual
results or events to differ materially from those anticipated in
such forward-looking information. Forward-looking information in
this news release includes, without limitation, statements with
respect to: the use of proceeds from the Offering including the
partial funding of the redemption of the 2022 Debentures and
expected timing thereof; the intended issuance of the Notice to the
registered holder of the 2022 Debentures; the intention to make
copies of the Trust Indenture and Supplemental Indenture available
on SEDAR at www.sedar.com; and AHIP's long-term objectives.
Forward-looking information is based on a number of key
expectations and assumptions made by AHIP, including, without
limitation: a reasonably stable North American economy and stock
market; the continued strength of the U.S. lodging industry; the
ability to successfully complete the redemption of the 2022
Debentures on the Redemption Date; the ability to make copies
of the Trust Indenture and Supplemental Indenture available on
SEDAR at www.sedar.com; and the value of the U.S. dollar. Although
the forward-looking information contained in this news release is
based on what AHIP's management believes to be reasonable
assumptions, AHIP cannot assure investors that actual results will
be consistent with such information.
Forward-looking information reflects current expectations of
AHIP's management regarding future events and operating performance
as of the date of this news release. Such information involves
significant risks and uncertainties, should not be read as
guarantees of future performance or results, and will not
necessarily be accurate indications of whether or not such results
will be achieved. Actual results could differ materially from those
currently anticipated due to a number of factors and risks. These
include, without limitation: AHIP may not have sufficient funds to
complete the redemption of the 2022 Debentures by the Redemption
Date, as well as those risk factors that can be found under "Risk
Factors" in AHIP's Annual Information Form dated March 15, 2021 and under "Risks and
Uncertainties" in AHIP's Management's Discussion and Analysis dated
November 9, 2021, both of which are
available on SEDAR at www.sedar.com.
The forward-looking statements contained herein represent AHIP's
expectations as of the date of this news release, and are subject
to change after this date. AHIP assumes no obligation to update or
revise any forward-looking statements whether as a result of new
information, future events or otherwise, except as required by
applicable law.
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SOURCE American Hotel Income Properties REIT LP