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Northwest Healthcare Properties Real Estate Investment Trust Announces $75 Million Convertible Debenture Bought Deal

Press Release





TORONTO, April 18, 2023 (GLOBE NEWSWIRE) — Northwest Healthcare Properties Real Estate Investment Trust (TSX: NWH.UN) (“Northwest” or the “REIT”) announced today a public offering, on a “bought deal” basis, of $75 million principal amount of convertible unsecured subordinated debentures (the “Debentures”), at a price of $1,000 per Debenture, with an interest rate of 7.75% per annum, payable semi-annually on the last date of April and October commencing on October 31, 2023 (the “Offering”). The Debentures will mature on April 30, 2028. The Offering is being made through a syndicate of underwriters co-led by Scotiabank and RBC Capital Markets.


The REIT has also granted the underwriters the option to purchase up to $11.25 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 $10.55 per unit. The Debentures will not be redeemable prior to April 30, 2026. From May 1, 2026 to April 30, 2027, 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 May 1, 2027 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 short-term floating rate debt with a weighted average interest rate of approximately 9.3% and for general trust purposes.


The Offering and the identified use of proceeds are not expected to impact the REIT’s leverage metrics, however are expected to improve the REIT’s debt maturity profile and increase its exposure to fixed rate debt providing additional certainty in respect of interest expense over the coming years.


The REIT continues to make progress on its previously announced U.K. joint venture (the “UK JV”) where it has secured a conditional commitment from an institutional investor for 70% to 80% of the net equity value of the UK REIT structure that indirectly owns the UK portfolio. The commitment is subject to confirmatory due diligence, final documentation and typical closing conditions and is expected to close in Q2 2023. Upon completion of the Offering and the planned UK JV, the REIT expects to reduce proportionate leverage by approximately 400 bps to 500 bps to between 51% and 52%.


The Offering is subject to normal regulatory approvals, including approval of the Toronto Stock Exchange and is expected to close on or about April 27, 2023.


The Debentures will be offered pursuant to the REIT’s base shelf prospectus dated February 2, 2023. 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) (Northwest) is an unincorporated, open-ended real estate investment trust established under the laws of the Province of Ontario. As at December 31, 2022, 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 233 income-producing properties and 18.6 million square feet of gross leasable area located throughout major markets in Canada, the United States, 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 300 professionals in ten offices in eight countries to serve as a long-term real estate partner to leading healthcare operators.


Forward Looking Information

This press release contains “forward-looking statements” within the meaning of applicable securities laws, including statements about the Offering and the proposed use of proceeds thereof, the UK JV, the expectations regarding the REIT’s debt maturity profile, floating rate debt exposure and leverage metrics. The forward-looking statements in this news release are based on certain assumptions, including without limitation that all conditions to completion of the Offering will be satisfied or waived. 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 UK JV will not be completed as anticipated, the Offering 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 31, 2023, a copy of which may be obtained on the SEDAR website at


For Further Information:
Paul Dalla Lana
CEO, Northwest Healthcare Properties REIT
(416) 366-8300 x1001


Northwest Healthcare Properties REIT
180 Dundas Street West, Suite 1100, Toronto, ON M5G 1Z8

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