Temple REIT Announces Filing of Preliminary Prospectus in Connection with a Convertible Debenture and Trust Units Issue

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WINNIPEG, Feb. 7, 2012 /CNW/ - Temple REIT (TSX Venture: TR.UN) ("TREIT" or the "REIT") today announced that it has filed a preliminary short form prospectus in all the provinces and territories of Canada (excluding Quebec), and obtained a receipt therefor, with respect to a public offering of $15 million principal amount of 7.75% Series D Convertible Redeemable Unsecured Subordinated Debentures due June 30, 2017 ("Debentures") at a price of $1,000 per Debenture and a concurrent public offering consisting of approximately $10 million trust units ("Units") at a price to be determined in the context of the market for aggregate gross proceeds of $25 million (the "Offering"). The syndicate of agents is led by National Bank Financial Inc. and also includes Mackie Research Capital Corp., Raymond James Ltd., Desjardins Securities Inc., Dundee Securities Ltd., HSBC Securities (Canada) Inc. and Lightyear Capital Inc. (collectively, the "Agents").  The REIT has also granted the Agents an over-allotment option exercisable at any time up to the date that is 30 days from the date of closing of the offering to offer for sale up to an additional $2,250,000 aggregate principal amount of Debentures and up to a total of approximately $1,500,000 of Units sold pursuant to the Offering on the same terms and conditions.

The Offering is expected to close in February or March 2012 and is subject to regulatory approval.  The net proceeds from the Offering, after payment of the expenses of the Offering, will be used: (a) to fund additional acquisitions of income-producing hotel properties; (b) for repayment of debt; (c) for general trust purposes; and (d) for working capital.

The Debentures will be convertible at the holder's option into Units (the "Underlying Units") of TREIT at any time prior to the close of business on the maturity date or, if called for redemption, on the business day immediately preceding the date fixed for redemption of the Debentures.  Holders converting their Debentures will receive accrued and unpaid interest theron for the period from the date of the last interest payment date to and including: (a) if TREIT is making monthly distributions to its Unitholders, the last record date set by TREIT prior to the date of conversion for determining the Unitholders entitled to receive a monthly distribution on the Units; or (b) if TREIT is not making monthly distributions to its Unitholders, the date of conversion. The conversion price will be equal to a 30% premium to the volume-weighted average price of the Units of the REIT for the 20 consecutive trading days ending on the date prior to the date of the final prospectus for the Offering.

The Debentures will not be redeemable before June 30, 2015 (the "First Call Date"). On and after the First Call Date and prior to June 30, 2016 the Debentures will be redeemable in whole or in part from time to time at TREIT's sole option on not more than 60 and not less than 30 days notice, at a price equal to the principal amount plus accrued and unpaid interest, provided that the volume-weighted average trading price of the Units on the TSX Venture Exchange, or such other exchange upon which the Units are listed at the time, as applicable, during the 20 consecutive trading days ending on the fifth trading day preceding the date on which notice of redemption is given is not less than 125% of the conversion price.

On and after June 30, 2016 but prior to the maturity date, the Debentures will be redeemable, in whole or in part, at a price equal to the principal amount thereof, plus accrued and unpaid interest, at TREIT's sole option on not more than 60 days' and not less than 30 days' prior notice.

The REIT has applied to the TSX Venture Exchange (the "Exchange") to list the Debentures and the Units.  Listing will be subject to the REIT satisfying all requirements of the Exchange.

The securities being offered have not been, nor will be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirement of such Act.  This release does not constitute an offer for sale of the Debentures or Units.

About Temple REIT
TREIT is a real estate investment trust, which is listed on the TSX Venture Exchange under the symbols TR.UN (trust units), TR.DB.A, TR.DB.B, TR.DB.C and TR.DB.S (convertible debentures). The objective of TREIT is to provide Unitholders with stable cash distributions from investment in a geographically diversified Canadian portfolio of hotel properties and related assets. For further information on TREIT, please visit our website at www.treit.ca.

This press release contains certain statements that could be considered as forward-looking information. The forward-looking information is subject to certain risks and uncertainties, which could result in actual results differing materially from the forward-looking statements.

The TSX Venture Exchange has not reviewed or approved the contents of this press release and does not accept responsibility for the adequacy or accuracy of this press release.

Arni Thorsteinson, Chief Executive Officer, or
Gino Romagnoli, Investor Relations

Tel: [phone], Fax: [phone], Email: [email protected]