Northwest Healthcare Properties Real Estate Investment Trust Announces Increase to Previously Announced Equity Financing from $225 Million to $250 Million

TORONTO, Dec. 11, 2019 (GLOBE NEWSWIRE) -- NorthWest Healthcare Properties Real Estate Investment Trust (“NorthWest” or the “REIT”) (TSX: NWH.UN) announced today that, due to strong demand, it has increased the size of the previously announced public offering to 18,450,000 trust units (“Units”) at a price of $12.20 per Unit (the “Offering Price”)  for gross proceeds of approximately $225.1 million (the “Public Offering”). The Public Offering is being sold on a bought deal basis to a syndicate of underwriters led by BMO Capital Markets, RBC Capital Markets and Scotiabank.

The REIT has also granted the underwriters the option to purchase up to an additional 2,767,500 Units to cover over-allotments, if any, exercisable in whole or in part anytime up to 30 days following closing of the Public Offering.

Together with the previously announced $25.0 million private placement to NorthWest Value Partners Inc. (the “Private Placement” and together with the Public Offering, the “Offering”), the total size of the Offering has increased to $250.1 million (or approximately $283.9 million assuming the exercise in full of the over-allotment option).

Upon closing of the Private Placement, which is expected to occur in January 2020, NWVP will hold an approximate 16.0% effective interest in the REIT through ownership of Units and Class B LP units (or approximately 15.7% assuming the exercise in full of the over-allotment option).

The REIT intends to use the net proceeds of the Offering to repay $215 million of corporate debt with a weighted average interest rate of approximately 6.4% and a weighted average term to maturity of approximately three years, as well as to expand its European platform through the acquisition of three properties (two clinics in Germany and one medical office building in the Netherlands) (the “Acquisition Properties”) for a combined purchase price of approximately $68.5 million at a weighted average stabilized capitalization rate of approximately 5.8%.

The above use of proceeds is described in more detail in the REIT’s press release dated December 10, 2019.

Pro forma the Offering, the intended use of proceeds (including full redemption of both series of convertible debentures) and previously disclosed acquisition activity subsequent to Q3 2019, NorthWest's consolidated leverage is expected to be reduced by 350bps from approximately 53% as at Q3 2019 to approximately 49%.  To the extent that any of the 5.50% Series D convertible debentures (which are currently in-the-money) are converted into trust units, the REIT’s intention is to use proceeds from the Offering that were allocated to repay these convertible debentures to repay other corporate debt.  Assuming that all of the Series D convertible debentures are converted into equity and an additional approximately $52.8 million of debt is repaid, the REIT’s consolidated leverage would be reduced by a further 100bps to approximately 48% pro forma the Offering.