Atrium Mortgage Investment Corporation Announces $30 Million Public Offering of Convertible Unsecured Subordinated Debentures

TORONTO, CANADA--(Marketwired - June 4, 2013) -

THIS NEWS RELEASE IS NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

Atrium Mortgage Investment Corporation (TSX:AI) ("Atrium") is pleased to announce that, in connection with the proposed public offering of convertible unsecured subordinated debentures previously announced on June 3, 2013, it has entered into an agreement with a syndicate of underwriters bookrun by TD Securities Inc., co-led by CIBC and RBC Capital Markets, and including BMO Capital Markets, National Bank Financial Inc., Scotiabank, Dundee Securities Ltd., Canaccord Genuity Corp., Industrial Alliance Securities Inc., Macquarie Capital Markets Canada Ltd., Raymond James Ltd., Mackie Research Capital Corporation and M Partners Inc., pursuant to which the underwriters will purchase $30 million aggregate principal amount of 5.25% convertible unsecured subordinated debentures of Atrium due June 30, 2020 at a price of $1,000 per debenture. Atrium has granted the underwriters an over-allotment option to purchase up to $4.5 million additional aggregate principal amount of debentures, exercisable, in whole or in part, at any time until 30 days following the closing of the offering. If the over-allotment option is exercised in full, the gross proceeds of the offering will be $34.5 million.

Atrium will use the net proceeds of the offering for general corporate purposes and to repay existing indebtedness under its revolving operating credit facility, which will then be available to be drawn, as required, for general corporate purposes, particularly funding future mortgage loan opportunities.

The offering of debentures is expected to close on or about June 18, 2013 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals, including the approval of the Toronto Stock Exchange.

The debentures will mature on June 30, 2020 and will accrue interest at the rate of 5.25% per annum payable semi-annually in arrears on June 30 and December 31 in each year, commencing December 31, 2013. At the holder's option, the debentures may be converted into common shares of Atrium at any time prior to the close of business on the earlier of the business day immediately preceding the maturity date and the business day immediately preceding the date fixed for redemption of the debentures. The conversion price will be $13.50 for each common share, subject to adjustment in certain circumstances.

The debentures will be direct, unsecured obligations of Atrium, subordinated to other indebtedness of Atrium for borrowed money and ranking equally with all other unsecured subordinated indebtedness.

The debentures will not be redeemable before June 30, 2016. On and after June 30, 2016 and prior to June 30, 2018, the debentures may be redeemed, in whole or in part, from time to time at Atrium's option at par plus accrued and unpaid interest, provided that the weighted average trading price of the common shares of Atrium on the Toronto Stock Exchange during the 20 consecutive trading days ending on the fifth trading day preceding the date on which notice of the redemption is given is not less than 125% of the conversion price. On and after June 30, 2018, Atrium may, at its option, redeem the debentures, in whole or in part, from time to time at par plus accrued and unpaid interest.

Subject to specified conditions, Atrium will have the right to repay the outstanding principal amount of the debentures, on maturity or redemption, through the issuance of its common shares. Atrium will also have the option to satisfy its obligation to pay interest through the issuance and sale of its common shares.

A preliminary short-form prospectus for the offering was previously filed with the securities regulatory authorities in all provinces of Canada, except Québec. An amended and restated preliminary short-form prospectus is expected to be filed with the securities regulatory authorities in all provinces of Canada, except Québec, as soon as possible.

No securities regulatory authority has either approved or disapproved of the contents of this news release. The securities being offered have not been, and will not be, registered under the United States Securities Act of 1933, as amended, or any state securities laws, and may not be offered or sold in the United States unless an exemption from registration is available. This news release is for information purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities of Atrium in any jurisdiction.

About Atrium

As a mortgage investment corporation, Atrium is a non-bank provider of residential and commercial mortgages that lends in major urban centres in Canada where the stability and liquidity of real estate are high. Atrium's objectives are to provide its shareholders with stable and secure dividends and preserve shareholders' equity by lending within conservative risk parameters.

Forward-Looking Statements

Certain information included in this news release is forward-looking, within the meaning of applicable securities laws. Much of this information can be identified by words such as "believe", "expects", "expected", "will", "intends", "projects", "anticipates", "estimates", "continues" or similar expressions suggesting future outcomes or events. Atrium believes the expectations reflected in such forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon.

Forward-looking statements are based on current information and expectations that involve a number of risks and uncertainties, which could cause actual results or events to differ materially from those anticipated. These risks include, but are not limited to, risks associated with the ability to satisfy regulatory, stock exchange and commercial closing conditions of the offering, the uncertainty associated with accessing capital markets and the risks related to Atrium's business, including those identified in Atrium's annual information form for the year ended December 31, 2012 under the heading "Risk Factors" (a copy of which can be obtained at www.sedar.com). Forward looking statements contained in this news release are made as of the date hereof and are subject to change. All forward-looking statements in this news release are qualified by these cautionary statements. Except as required by applicable law, Atrium undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

The amended and restated preliminary short form prospectus will contain important information relating to these securities, but will remain subject to completion or amendment. Copies of the amended and restated preliminary prospectus will be available at www.sedar.com or from any of the underwriters named above. There will not be any sale or acceptance of an offer to buy the securities until a receipt for Atrium's (final) short form prospectus has been issued.