STELLARTON, NS, Nov. 27 /CNW/ – Crombie Real Estate Investment Trust ("Crombie") (TSX: CRR.UN) is pleased to report that it has completed a previously disclosed $37 million mortgage financing with Industrial Alliance Insurance and Financial Services Inc. and Desjardins Asset Management Inc. on six properties acquired in a portfolio acquisition in April of 2008. The proceeds of this financing were applied to retire a floating rate term facility (the "Term Facility") used to partially finance the acquisition by Crombie of a portfolio of 61 properties (the "Portfolio Acquisition").
The mortgages will have a 10 year term and a 20 year amortization with a fixed interest rate of 6.90%. Factoring in the cost of settling the delayed interest rate swap placed upon assumption of the Term Facility, the overall weighted average interest rate is 8.74%.
Today's financing completes the replacement of the $280 million Term Facility with long term debt. The overall weighted average interest rate for the financings is approximately 7.46%, including the cost of settling the related delayed interest rate swap agreements. This is 111 basis points higher than the 6.35% rate used to model the pro forma accretion of the Portfolio Acquisition.
Commenting on the closing of the financing, Donald Clow, F.C.A., President and Chief Executive Officer stated: "This financing concludes the replacement of the Term Facility with long-term financing which has been a management priority for the past 18 months. I am pleased that Crombie has been able to replace the Term Facility during some very difficult economic conditions, which I believe reflects the strength of the Crombie portfolio and support we have from the lending community."
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 11.2 million square feet of rentable space.
This news release may contain 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.
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