Morguard North American Residential REIT announces public offering of $95 million of trust units and $60 million of convertible debentures

/NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE SERVICES/

TORONTO, Feb. 25, 2013 /CNW/ - Morguard North American Residential Real Estate Investment Trust (the "REIT") (TSX: MRG.UN) announced today that it has reached an agreement with a syndicate of underwriters co-led by RBC Capital Markets and TD Securities, with RBC Capital Markets acting as bookrunner (collectively, the "Underwriters"), to issue to the public, subject to regulatory approval, on a bought deal basis, 8,270,000 trust units (the "Units") at a price of $11.50 per Unit representing gross proceeds of $95,105,000 and $60,000,000 aggregate principal amount of 4.65% convertible unsecured subordinated debentures due March 30, 2018 (the "Debentures", collectively with the Units the "Offering").  The Debentures are convertible at the option of the holder, into trust units of the REIT at $15.50 per trust unit.

As part of the transaction, Morguard Corporation has agreed to purchase approximately $10 million of the Units being offered, being 870,000 Units, at the offering price and $5 million aggregate principal amount of the Debentures. Morguard Corporation currently holds an approximate 57.0% effective interest in the REIT through ownership of Units and Class B LP Units.  After the offering Morguard Corporation will hold an approximate 48.8% effective interest in the REIT through ownership of Units and Class B LP Units.

The net proceeds from the Offering will be used to partially fund the acquisition of 3,752 multi-family residential units in the U.S. for gross consideration of US$457.8 million, as previously announced on January 9, 2013, and for general trust purposes. The Offering is not conditional upon the closing of such acquisition.

The REIT will, by March 1, 2013, file with the securities commissions and other similar regulatory authorities in each of the provinces and territories of Canada, excluding Quebec, a preliminary short form prospectus relating to the issuance of the Units and the Debentures.  Closing of the Offering is expected to occur on or about March 15, 2013.

The Units and the Debentures have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered, sold or delivered, directly or indirectly, in the United States or to, or for the account or benefit of, "U.S. persons" (as defined in Regulation S under the United States Securities Act of 1933, as amended). This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the Units or the Debentures in the United States or to, or for the account or benefit of, U.S. Persons.

About Morguard North American Residential REIT

The REIT is an unincorporated, open-ended real estate investment trust established under the laws of the Province of Ontario.  It trades on the Toronto Stock Exchange under the ticker symbol MRG.UN.  With a strategic focus on the acquisition of high-quality multi-unit residential properties in Canada and the United States, the REIT maximizes long-term unit value through active asset and property management. Its portfolio consists of 7,408 residential suites (as of February 19, 2013) located in Ontario, Alberta, Louisiana and Florida, with an IFRS value of approximately $997 million.

Forward-Looking Information

Certain information in this press release may constitute forward-looking statements that involve a number of risks and uncertainties, including statements regarding the previously disclosed acquisition and the outlook for the REIT's business results of operations. Forward-looking statements use the words "believe," "expect," "anticipate," "may," "should," "intend," "estimate" and other similar terms, which do not relate to historical matters. Such forward-looking statements involve known and unknown risks and uncertainties and other factors that may cause the actual results to differ materially from those indicated. Such factors include, but are not limited to, general economic conditions, the availability of new competitive supply of commercial real estate that may become available either through construction or sublease, the REIT's ability to maintain occupancy and to lease or re-lease space on a timely basis at current or anticipated rates, tenant bankruptcies, financial difficulties and defaults, changes in interest rates, changes in operating costs, the REIT's ability to obtain adequate insurance coverage at a reasonable cost and the availability of financing. The REIT believes that the expectations reflected in forward-looking statements are based on reasonable assumptions; however, the REIT can give no assurance that actual results will be consistent with these forward-looking statements. Except as required by applicable law, the REIT disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. Readers should be cautioned not to place undue reliance on the forward-looking statements.

SOURCE: Morguard North American Residential Real Estate Investment Trust

K. (Rai) Sahi
Chief Executive Officer 
[phone] 

Paul Miatello
Chief Financial Officer
[phone]