Morguard REIT announces $150.0 million offering of convertible debentures

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

TSX SYMBOL:   MRT.UN

TORONTO, Oct. 16, 2012 /CNW/ - Morguard Real Estate Investment Trust ("Morguard REIT" or the "REIT") (TSX: MRT.UN), announced today that it has entered into an agreement with a syndicate of underwriters, co-led by RBC Capital Markets and TD Securities Inc., with RBC Capital Markets acting as bookrunner, for the purchase by the underwriters, on a bought deal basis, subject to regulatory approval, of $150 million aggregate principal amount of 4.85% convertible unsecured subordinated debentures due October 31, 2017 (the "Debentures"). The Debentures are convertible, at the option of the holder, into trust units of Morguard REIT at $24.60 per trust unit.

As part of the transaction, Morguard Corporation has agreed to purchase approximately $50 million of the Debentures being offered.

Morguard REIT will, by October 18, 2012, 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 Debentures.  The offering is expected to close on or about October 31, 2012.

The net proceeds from the offering of Debentures (after deducting the Underwriters' fee and estimated offering expenses) will be used, in part, to fund an acquisition currently under negotiation, to fund future acquisitions, for debt repayment and for general trust purposes.

Consistent with our past practices and in the normal course, we engage in discussions with respect to possible acquisitions and have entered into an acquisition agreement in respect of an office property, which is subject to a number of conditions. There can be no assurance that any of these discussions will result in a definitive agreement and, if they do, whether such acquisition will be completed on the terms of such agreement or at all. We expect to continue current discussions and actively pursue other acquisition and investment opportunities.

This press release does not constitute an offer to sell, or the solicitation of an offer to buy, any securities in any jurisdiction. The securities being offered have not been and will not be registered under the U.S. Securities Act of 1933 and state securities laws. Accordingly, the securities may not be offered or sold to U.S. persons except pursuant to applicable exemptions from registration requirements.

About Morguard REIT

Morguard REIT is a closed-end real estate investment trust, which owns a diversified portfolio of 53 high quality retail, office and mixed use properties in Canada with an approximate value of $2.2 billion and comprising approximately 8.5 million square feet of leaseable space.

Certain information in this press release may constitute forward-looking statements that involve a number of risks and uncertainties, including statements regarding 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, the ability to complete potential acquisitions 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 Real Estate Investment Trust