CT Real Estate Investment Trust Prices $263.5 Million Initial Public Offering

CT Real Estate Investment Trust and Canadian Tire Corporation, Limited  announced that the REIT has filed and obtained a receipt from the securities regulatory authorities of all provinces and territories in Canada for a final prospectus in respect of the initial public offering of 26,350,000 trust units of the REIT. The Units will be issued at a price of $10.00 per Unit and are expected to provide Unitholders with an annual yield of approximately 6.50%. Gross proceeds of the Offering will be $263.5 million.
 
Copies of the final prospectus will be available under CT REIT's issuer profile on SEDAR at sedar.com.
 
The closing of the Offering is expected to occur on or about October 23, 2013.  In connection with the closing, the net proceeds of the Offering will be partly used by CT REIT to indirectly acquire, through CT REIT Limited Partnership (the "Partnership"), from Canadian Tire a portfolio of real estate that will consist of 256 properties totaling approximately 19.0 million square feet of gross leasable area, comprising 255 retail properties and one distribution centre.
 
The Offering is being underwritten by a syndicate of underwriters with RBC Capital Markets and CIBC acting as joint bookrunners. The underwriters have been granted an over-allotment option, exercisable at any one time up to 30 days following closing to purchase up to an additional 3,952,500 Units which, if exercised in full, will increase the total gross proceeds of the Offering to approximately $303 million. The net proceeds of the over-allotment option will be used by CT REIT for future acquisitions, investments in properties and for general trust purposes.
 
On closing, it is expected that Canadian Tire will hold an approximate 85.0% effective interest (or an approximate 83.1% effective interest if the over-allotment is exercised in full) on a fully diluted basis in CT REIT through ownership of 59,711,094 Units and all of the Class B limited partnership units of the Partnership, which are economically equivalent to and exchangeable for Units. In addition, Canadian Tire will hold all of the outstanding Class C limited partnership units of the Partnership.
 
CT REIT will be managed and operated by an experienced internal management team. The REIT has been assigned a provisional issuer credit rating of "BBB (high)" by DBRS and "BBB+" by S&P, both with a "stable" outlook. In addition, after considering the REIT transaction, both rating agencies confirmed Canadian Tire's credit ratings of "BBB (high)" and "BBB+," respectively, each with a "stable" outlook and Canadian Tire expects that both rating agencies will confirm those credit ratings following closing.
 
CT REIT initially intends to make monthly cash distributions of $0.054167 per Unit. The first distribution of the REIT will be in the amount of $0.070194 per Unit for the period from closing to November 30, 2013 and will be paid on December 13, 2013, assuming closing occurs on October 23, 2013. Declared distributions will be paid on or about the 15th day of each month to Unitholders of record at the close of business on the last business day of the immediately preceding month.
 
The Toronto Stock Exchange has conditionally approved the listing of the Units under the symbol "CRT.UN". Listing is subject to the REIT fulfilling all of the requirements of the TSX on or before December 30, 2013.
 
Following closing and subject to regulatory approvals, CT REIT intends to adopt a Distribution Reinvestment Plan ("DRIP"). Eligible Unitholders who elect to participate in the DRIP will receive a further distribution of Units equal to three per cent of the amount reinvested.
 
The Units have not been, nor will they be, registered under the U.S. Securities Act of 1933, as amended, and may not be offered, sold or delivered, directly or indirectly, in the United States or to, or for the account or benefit of, ''U.S. persons'' (as defined in Regulation S under the United States Securities Act of 1933, as amended) except pursuant to certain exemptions. This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the Units in the United States or to, or for the account or benefit of, U.S. persons.
 

on October 15, 2013