STELLARTON, NS, Sept. 30 /CNW/ – Crombie Real Estate Investment Trust ("Crombie") (TSX: CRR.UN) is pleased to report that it closed today the previously announced mortgage financing with HBOS Canada ("HBOS") to refinance $100 million of the bridge loan used to partially finance the portfolio acquisition of 61 properties completed on April 22, 2008. TD Securities acted as agent on the transaction. The fixed rate mortgages have a weighted average 7.7 year term, with a 25 year amortization, and a weighted average interest rate of 5.91%. Factoring in the cost of delayed interest rate swap hedges placed upon assumption of the bridge loan, the overall weighted average interest rate is 6.09%. This overall weighted average interest rate is 26 basis points lower than the 6.35% rate used to model the pro forma accretion of the portfolio acquisition.
Commenting on the closing of the financing, J. Stuart Blair, President and Chief Executive Officer stated: "While the credit markets continue to prove to be challenging, the progress made in replacing a major portion of our bridge loan with suitable long term financing is very encouraging. We are also excited to be able to attract international financing as one of the early deals completed by HBOS in Canada. We continue to have discussions with a number of potential sources for completing the refinancing of the $180 million bridge loan remaining."
Crombie is an open-ended real estate investment trust established under, and governed by, the laws of the Province of Ontario. The trust invests in income-producing retail, office and mixed-use properties in Canada, with a future growth strategy focused primarily on the acquisition of retail properties. Crombie currently owns a portfolio of 113 commercial properties in seven provinces, comprising approximately 11.1 million square feet of rentable space.
This news release contains forward looking statements that reflect the current expectations of management of Crombie about Crombie's future results, performance, achievements, prospects and opportunities. Wherever possible, words such as "continue", "may", "will", "estimate", "anticipate", "believe", "expect", "intend" and similar expressions have been used to identify these forward looking statements. These statements reflect current beliefs and are based on information currently available to management of Crombie. Forward looking statements necessarily involve known and unknown risks and uncertainties. A number of factors, including those discussed in the 2008 annual Management Discussion and Analysis under "Risk Management", could cause actual results, performance, achievements, prospects or opportunities to differ materially from the results discussed or implied in the forward looking statements. These factors should be considered carefully and a reader should not place undue reliance on the forward looking statements. There can be no assurance that the expectations of management of Crombie will prove to be correct.
In particular, certain statements in this document discuss Crombie's anticipated outlook of future events. These statements include, but are not limited to refinancing of the remaining bridge loan, which could be impacted by credit markets conditions including liquidity, credit spreads and other financing risks. Readers are cautioned that such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from these statements. Crombie can give no assurance that actual results will be consistent with these forward-looking statements.
Contact: Scott Ball, C.A., Vice President, Chief Financial Officer and Secretary, Crombie REIT, (902) 755-8100