Northwest Healthcare Properties Real Estate Investment Trust Announces $125 Million Convertible Debenture Bought Deal

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TORONTO, Dec. 11, 2018 /CNW/ - NorthWest Healthcare Properties Real Estate Investment Trust ("NorthWest" or the "REIT") (TSX: NWH.UN) announced today a public offering, on a "bought deal" basis, of $125 million principal amount of convertible unsecured subordinated debentures, at a price of $1,000 per debenture, with an interest rate of 5.50% per annum, payable semi-annually on the last day of June and December commencing on June 30, 2019 (the "Debentures"). The Debentures will mature on December 31, 2023.

The offering is being made through a syndicate of underwriters led by RBC Capital Markets and BMO Capital Markets.

The REIT has also granted the underwriters the option to purchase up to $18.75 million principal amount of additional Debentures at a price of $1,000 per Debenture to cover over-allotments, exercisable in whole or in part anytime up to 30 days following closing of the offering.

The Debentures will be convertible at the holder's option into units of the REIT at a conversion price of $13.35 per unit. The debentures will not be redeemable prior to December 31, 2021. From January 1, 2022 to December 31, 2022, the Debentures may be redeemed in whole or in part from time to time at the REIT's option, at a price equal to their principal amount plus accrued and unpaid interest, provided that the volume weighted average trading price of the units on the Toronto Stock Exchange for the 20 consecutive trading days preceding the date on which the notice of redemption is given is not less than 125% of the conversion price. From January 1, 2023 onward, the Debentures will be redeemable at the option of the REIT, in whole or in part, at a redemption price equal to par plus accrued and unpaid interest.

The REIT intends to use the net proceeds of the Offering to repay $105.6 million of corporate debt (including the REIT's 7.25% convertible unsecured subordinated debentures maturing October 31, 2019)  with a weighted average interest rate and term to maturity of 6.96% and 0.9 years, respectively, as well as to expand its German MOB platform through the acquisitions of two German medical office properties (located in Berlin and Leipzig, respectively) for a combined purchase price of $30.6 million (€20.3 million) at a weighted average stabilized capitalization rate of 5.7%. The acquisitions will be funded with new property specific mortgages totaling $15.6 million (€10.3 million), at a weighted average interest rate of 1.71% (7.0 year  weighted average term to maturity), proceeds from the offering and the remainder using the REIT's existing resources. The acquisitions are expected to close in Q4-2018 and are subject only to normal closing conditions.

The offering and the identified use of proceeds are expected to be immediately accretive, while also improving the REIT's overall cost of debt and debt maturity profile.

The offering is subject to normal regulatory approvals, including approval of the Toronto Stock Exchange, and is expected to close on or about December 20, 2018.

The Debentures will be offered pursuant to the REIT's base shelf prospectus dated October 19, 2018. The terms of the Debentures will be described in a prospectus supplement to be filed with securities regulators in all provinces and territories of Canada and may also be offered by way of private placement in the United States.

The securities offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an 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.

About NorthWest Healthcare Properties Real Estate Investment Trust

NorthWest Healthcare Properties Real Estate Investment Trust (TSX: NWH.UN) is an unincorporated, open-ended real estate investment trust established under the laws of the Province of Ontario. As at September 30, 2018 the REIT provides investors with access to a portfolio of high quality international healthcare real estate infrastructure comprised of interests in a diversified portfolio of 153 income-producing properties and 10.8 million square feet of gross leasable area located throughout major markets in Canada, Brazil, Europe, Australia and New Zealand. The REIT's portfolio of medical office buildings, clinics, and hospitals is characterized by long term indexed leases and stable occupancies. With a fully integrated and aligned senior management team, the REIT leverages over 180 professionals across nine offices in five countries to serve as a long term real estate partner to leading healthcare operators.

Forward-Looking Statements

This news release contains "forward-looking statements" within the meaning of applicable securities laws, including statements about the offering and the proposed use of proceeds thereof, including the weighted average stabilized capitalization rate of the proposed acquisitions, the extent to which the offering and use of proceeds are expected to be accretive and the REIT's overall cost of debt and debt maturity profile . The forward-looking statements in this news release are based on certain assumptions, including without limitation that all conditions to completion of the offering and the proposed acquisitions will be satisfied or waived, the proposed acquisitions will perform as expected, and that currency exchange rates remain consistent. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations, including the risk that the offering and proposed acquisitions will not be completed on the terms proposed, or at all or that other developments may arise that result in the REIT having to further increase its leverage. The statements in this news release are made as of the date of this release. Although the REIT believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and, accordingly, readers are cautioned not to place undue reliance on such statements due to the inherent uncertainty therein. A discussion of the risk factors applicable to the REIT is contained under the heading "Risk Factors" in the REIT's annual information form dated March 28, 2018, a copy of which may be obtained on the SEDAR website at www.sedar.com.

SOURCE NorthWest Healthcare Properties Real Estate Investment Trust

please contact Paul Dalla Lana, CEO at [phone] x 1001.

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