/NOT FOR DISTRIBUTION IN THE U.S. OR OVER U.S. NEWSWIRES/
VANCOUVER, Oct. 31, 2013 /CNW/ - American Hotel Income Properties REIT
LP ("AHIP") (Toronto Stock Exchange: HOT.UN; OTCQX: AHOTF) today announced the
closing of its previously announced bought deal public offering (the "Offering") of subscription receipts ("Subscription Receipts").
The Offering was conducted through a syndicate of underwriters co-led by
Canaccord Genuity Corp. and National Bank Financial Inc., and including
TD Securities Inc., CIBC World Markets Inc., Scotia Capital Inc.,
Haywood Securities Inc., Dundee Securities Ltd. and GMP Securities L.P.
(collectively, the "Underwriters"). AHIP also announced that the Underwriters have exercised their
over-allotment option (the "Over-Allotment Option") in the full amount.
AHIP issued a total of 3,967,500 Subscription Receipts at a price of
Cdn$10.15 per Subscription Receipt (the "Subscription Price") for gross proceeds of Cdn$40.3 million.
As described in AHIP's short form prospectus (the "Prospectus") dated October 24, 2013, available on SEDAR at www.sedar.com, AHIP intends to acquire four hotel properties located in metropolitan
Pittsburgh, Pennsylvania (the "Acquisition Properties") for an aggregate purchase price of approximately US$57.3 million (the
"Acquisition"), before customary closing and post-closing acquisition adjustments,
and to fund a US$6 million restricted cash reserve for brand mandated
property improvement plans (the "PIPs") related to the Acquisition Properties.
AHIP will use a portion of the net proceeds from the Offering to satisfy
the cash portion of the aggregate purchase price for the Acquisition
Properties including the funding of the PIPs, with the remainder of the
purchase price satisfied through debt financing described in the
Prospectus. The balance of the net proceeds of the Offering will be
used: (i) to pay AHIP's expenses incurred in connection with the
Offering; (ii) for future acquisitions of hotel properties, including
properties for which mezzanine financing has been provided by AHIP;
(iii) to renovate and rebrand AHIP's recently acquired property in
Jefferson City, Missouri to Oak Tree Inn standards; (iv) to fund
mezzanine loans for properties to be developed in accordance with the
development agreement in place between AHIP and SunOne Developments
Inc.; and (v) for general corporate and working capital purposes.
The completion of the Acquisition is expected to occur on or about
November 21, 2013 and not later than January 10, 2014. The proceeds
from the Offering will be held by Computershare Trust Company of Canada
(the "Subscription Receipt Agent"), and invested in short-term obligations of, or guaranteed by, the
Government of Canada or such other investments approved by AHIP and
consented to by the Underwriters. In the absence of a Termination Event
(as defined in the Prospectus), each Subscription Receipt entitles the
holder to receive, without payment of additional consideration, one
unit of AHIP (each, a "Unit") and an amount per Subscription Receipt equal to the amount per Unit
of any cash distributions made by AHIP for which record dates have
occurred during the period from and including October 31, 2013 to and
including the day immediately preceding the date Units are issued or
deemed to be issued (which amount will include the distribution in the
amount of $0.075 per Unit payable on November 15, 2013 to unitholders
of record on October 31, 2013).
If a Termination Event occurs, each Subscription Receipt will entitle
the holder thereof to receive an amount equal to the Subscription Price
plus a pro rata share of interest earned on the related funds by the
Subscription Receipt Agent, less any applicable withholding taxes.
The Subscription Receipts are listed on the Toronto Stock Exchange ("TSX") under the symbol HOT.R. Additional information relating to the
Subscription Receipts is included in the Prospectus.
AHIP's Units are listed on the TSX under the symbol HOT.UN. AHIP
currently has 10,405,000 Units issued and outstanding. Upon closing of
the Acquisition, and the exchange of Subscription Receipts for Units,
AHIP will have 14,372,500 Units issued and outstanding.
These securities have not been, and will not be, registered under the
United States Securities Act of 1933, as amended, and may not be
offered or sold in the United States without registration or an
applicable exemption from the registration requirements of such Act.
This news release does not constitute an offer for sale of these
securities in the United States.
Forward-Looking Information
Certain statements contained in this news release may constitute
forward-looking statements. Forward-looking statements are often, but
not always, identified by the use of words such as "anticipate",
"plan", "expect", "may", "will", "intend", "should", and similar
expressions. These statements involve 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
statements. Forward-looking statements in this news release include,
without limitation, the following: AHIP's intended uses of the net
proceeds from the Offering and the expected closing date of the
Acquisition.
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 and the ability to
successfully integrate the Acquisition Properties. 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, those
factors that can be found under "Risk Factors" in the Prospectus.
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.
About American Hotel Income Properties REIT LP
AHIP is a limited partnership formed under the Limited Partnerships Act (Ontario) to invest in hotel real estate properties located
substantially in the United States and engaged primarily in the
railroad employee accommodation, transportation, and contract-focused
lodging sectors. AHIP's long-term objectives are to: (i) generate
stable and growing cash distributions from hotel properties
substantially in the US; (ii) enhance the value of its assets and
maximize the long-term value of the hotel properties through active
management; and (iii) expand its asset base and increase its Adjusted
Funds From Operations ("AFFO") per Unit through an accretive acquisition program, participation in
strategic development opportunities and improvements to its properties
through targeted value-added capital expenditure programs.
Additional information relating to AHIP, including its other public
filings, is available on SEDAR at www.sedar.com and on AHIP's website at www.ahipreit.com.
THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT
RESPONSIBILITY FOR THE ADEQUACY OR THE ACCURACY OF THIS RELEASE.
SOURCE American Hotel Income Properties REIT LP
