Provides Update on Conversions under Temporary Change to the Conversion Privilege for Holders of its 5.50% Convertible Debentures
NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE SERVICES
Toronto, Ontario (August 9, 2011) – First Capital Realty Inc. (“First Capital Realty”) (TSX:FCR), Canada’s leading owner, developer and operator of supermarket and drugstore- anchored neighbourhood and community shopping centres, located predominantly in growing metropolitan areas, announced today that it closed its previously announced bought deal public offering of $57.5 million aggregate principal amount of 5.25% convertible unsecured subordinated debentures due January 31, 2019 (the “5.25% Debentures”). The closing included $7.5 million aggregate principal amount of 5.25% Debentures issued as a result of the exercise in full of the underwriters’ option.
First Capital Realty also provided an update on conversions under the temporary change to the conversion privilege for holders of its 5.50% convertible unsecured subordinated debentures (the “5.50% Debentures”). To date, a total of approximately $58 million principal amount of 5.50% Debentures have been converted into 3.57 million common shares pursuant to the temporary change to the conversion privilege for the 5.50% Debentures. These conversions include approximately $50 million principal amount of 5.50% Debentures converted by Gazit Canada Inc. (“Gazit Canada”) prior to the date hereof.
Completion of $57.5 Million Offering of 5.25% Debentures
The $57.5 million aggregate principal amount of 5.25% Debentures issued today bear interest at the rate of 5.25% per annum payable semi-annually on March 31 and September 30 (commencing March 31, 2012), and are convertible at the option of the holder into common shares of First Capital Realty at a conversion rate of approximately 42.0698 common shares per $1,000 principal amount of 5.25% Debentures, which is equal to a conversion price of $23.77 per common share. The bought deal public offering was underwritten by a syndicate co-led by RBC Dominion Securities Inc. and TD Securities Inc. and included CIBC World Markets Inc., Scotia Capital Inc., National Bank Financial Inc., BMO Nesbitt Burns Inc., Canaccord Genuity Corp. and Macquarie Capital Markets Canada Ltd.
Consistent with First Capital Realty’s existing practice in respect of all of its outstanding convertible debentures, and subject to any required regulatory approvals, it is First Capital Realty’s current intention to satisfy the interest payable, and the principal on redemption or at maturity, by issuing to holders of 5.25% Debentures that number of common shares of First
Capital Realty obtained by dividing the amount payable by 97% of the volume-weighted average trading price of the common shares on the Toronto Stock Exchange for the 20 consecutive trading days ending five trading days prior to the interest payment date or date of redemption or maturity.
The 5.25% Debentures, which are conditionally approved for listing on the Toronto Stock Exchange under the symbol FCR.DB.F, were issued pursuant to First Capital Realty’s trust indenture dated December 19, 2005, as supplemented, and rank pari passu with all of First Capital Realty’s other outstanding convertible unsecured subordinated debentures.
First Capital Realty will use the net proceeds from the offering for development and redevelopment activities, acquisitions and for general corporate purposes.
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.
Update on Conversions under Temporary Change to the Conversion Privilege for Holders of 5.50% Debentures
First Capital Realty announced on July 8, 2011 that it had received the requisite approvals to temporarily change the conversion privilege of its approximately $212.8 million outstanding principal amount of 5.50% Debentures, class CDN and class US (TSX: FCR.DB.A and FCR.DB.B). The temporary change reduces the conversion price of the 5.50% Debentures to $16.25 (being a ratio of approximately 61.538 common shares for each $1,000 principal amount of debentures), from the original conversion price of $16.425, for a period of 35 days ending at 5:00 p.m. (Toronto time) on August 16, 2011 (the “Expiry Time”).
To date, a total of approximately $58 million principal amount of 5.50% Debentures have been converted into 3.57 million common shares pursuant to the temporary change to the conversion privilege for the 5.50% Debentures. These conversions include approximately $50 million principal amount of 5.50% Debentures converted by Gazit Canada prior to the date hereof.
As of July 8, 2011, Gazit Canada, a wholly owned subsidiary of Gazit Globe Ltd., a publicly traded company listed on the Tel-Aviv stock exchange, was a holder of approximately 48.4% of First Capital Realty’s outstanding common shares and holder of approximately 74% of the outstanding 5.50% Debentures. Prior to the announcement of the temporary change to the conversion privilege for the 5.50% Debentures, Gazit Canada advised First Capital Realty of its intention, subject to market conditions, to exercise the conversion privilege at this special conversion price for not less than $74 million principal amount of the 5.50% Debentures it holds. At the request of First Capital Realty, Gazit Canada agreed to limit its exercise over that amount to a level such that it should not hold more than 50% of the common shares as a result of it exercising the conversion privilege at this special conversion price.
Holders of 5.50% Debentures are reminded that, in order to validly convert 5.50% Debentures at the temporarily reduced conversion price, the Indenture Trustee must receive a customary notice of conversion (which will need to be provided through brokers if debentures are held through a brokerage account, including through CDS Clearing and Depository Services Inc. (“CDS”)), before the Expiry Time.
Investors who hold 5.50% Debentures through a broker are urged to contact their broker well in advance of the Expiry Time as First Capital Realty understands that notice of this change, and the process for exercising the conversion privilege, is subject to the rules and procedures of the broker and, in turn, CDS. If a conversion notice is received after the Expiry Time, the 5.50% Debentures will be converted at the original conversion price.
For more information, please refer to First Capital Realty’s press release dated July 8, 2011.
ABOUT FIRST CAPITAL REALTY (TSX:FCR)
First Capital Realty is Canada’s leading owner, developer and operator of supermarket and drugstore anchored neighbourhood and community shopping centres, located predominantly in growing metropolitan areas. The Company currently owns interests in 165 properties, including four under development, totalling approximately 22.7 million square feet of gross leasable area and six sites in the planning stage for future retail development.
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This press release contains forward-looking statements and information within the meaning of applicable securities law. Forward-looking statements can be identified by the expressions “expects”, “believes”, “estimates”, “will”, “intends” and similar expressions. The forward-looking statements are not historical facts but reflect the Company’s current expectations regarding future results or events and are based on information currently available to management. Certain material factors and assumptions were applied in providing these forward-looking statements.
Management believes that the expectations reflected in forward-looking statements are based upon reasonable assumptions; however, the Company can give no assurance that actual results will be consistent with these forward- looking statements. 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 matters discussed under “Risks and Uncertainties” in First Capital Realty’s Management’s Discussion and Analysis and under “Risk Factors” in the Company’s current Annual Information Form. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, a forward-looking statement speaks only as of the date on which such statement is made. First Capital Realty undertakes no obligation to publicly update any such statement or to reflect new information or the occurrence of future events or circumstances, except as required by applicable securities law.
All forward-looking statements in this press release are made as of the date of this press release and are qualified by these cautionary statements.
For further information:
Dori J. Segal, President & C.E.O., or
Karen H. Weaver, C.F.O.
First Capital Realty Inc.
85 Hanna Avenue, Suite 400
Toronto, Ontario, Canada M6K 3S3
Tel: (416) 504-4114
Fax: (416) 941-165