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True North Apartment REIT completes previously announced $20 million debenture offering

June 16, 2014

/NOT FOR DISTRIBUTION IN THE U.S. OR OVER U.S. NEWSWIRES/

TORONTO, June 16, 2014 /CNW/ - True North Apartment Real Estate Investment Trust (the "REIT") (TSX: TN.UN) is pleased to announce that it has closed its previously announced bought deal offering (the "Offering") of 5.75% extendible convertible unsecured subordinated debentures (the "Debentures"). The REIT issued $20 million aggregate principal amount of Debentures to a syndicate of underwriters co-led by CIBC and Raymond James Ltd. for gross proceeds of $20 million. The Debentures will commence trading today on the Toronto Stock Exchange ("TSX") under the symbol "TN.DB".  The Debentures were qualified by a prospectus dated June 9, 2014 which has been filed with the regulatory authorities in each of the provinces and territories in Canada and is available at www.sedar.com.

The net proceeds from the Offering will be used to satisfy the cash portion of the purchase price and expenses of the previously announced acquisition of a portfolio comprising 29 multi-suite residential properties that contain 2,824 residential suites located in Ontario and Alberta (the "Acquisition"). The Acquisition is expected to close on or about June 27, 2014 and is subject to minority unitholder approval at a unitholder meeting scheduled to be held on June 26, 2014, final TSX approval and satisfaction of customary closing conditions, including satisfactory due diligence and lender consents.

The maturity date of the Debentures will initially be the date (the "Initial Maturity Date") upon which a Termination Event (as defined below) occurs and if the completion of the Acquisition occurs prior to the occurrence of a Termination Event, the maturity date of the Debentures will be automatically extended from the Initial Maturity Date to June 30, 2019 (the "Final Maturity Date"). In the event that the completion of the Acquisition does not occur prior to the occurrence of a Termination Event, the Debentures will mature on the Initial Maturity Date and the REIT will repay to holders the aggregate principal amount of outstanding Debentures, together with accrued and unpaid interest thereon. The term "Termination Event" means the earliest to occur of any of: (i) the closing of the Acquisition not occurring on or before 5:00 p.m. (EST) on August 29, 2014, (ii) the REIT declaring in writing that the Acquisition has been terminated, or that the REIT will not be proceeding with the Acquisition, or (iii) the REIT formally announcing to the public by way of a press release that it does not intend to proceed with the Acquisition.

As previously announced, the REIT has also granted the underwriters of the Offering an over-allotment option to purchase up to an additional $3 million aggregate principal amount of Debentures at the same offering price, exercisable at anytime not later than the earlier of (i) July 16, 2014 and (ii) the occurrence of a Termination Event. The net proceeds from over-allotment option, if exercised, will be used to repay indebtedness, for future acquisitions and/or general trust purposes

Forward-looking Statements

Certain statements contained in this press release constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking statements are provided for the purposes of assisting the reader in understanding the REIT's financial position and results of operations as at and for the periods ended on certain dates and to present information about management's current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. Forward-looking information may relate to the REIT's future outlook and anticipated events, including completion of the Acquisition and the anticipated use of the net proceeds of the Offering and over-allotment option, and may include statements regarding the financial position, business strategy, budgets, litigation, projected costs, capital expenditures, financial results, taxes and plans and objectives of or involving the REIT. Particularly, statements regarding future results, performance, achievements, prospects or opportunities for the REIT or the real estate industry are forward-looking statements. In some cases, forward-looking information can be identified by terms such as "may", "might", "will", "could", "should", "would", "occur", "expect", "plan", "anticipate", "believe", "intend", "seek", "aim", "estimate", "target", "project", "predict", "forecast", "potential", "continue", "likely", "schedule", or the negative thereof or other similar expressions concerning matters that are not historical facts.

Forward-looking statements necessarily involve known and unknown risks and uncertainties, that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. A variety of factors, many of which are beyond the REIT's control, affect the operations, performance and results of the REIT and its business, and could cause actual results to differ materially from current expectations of estimated or anticipated events or results. These factors include, but are not limited to, the risks discussed in the REIT's materials filed with Canadian securities regulatory authorities from time to time on www.sedar.com. The reader is cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking statements as there can be no assurance that actual results will be consistent with such forward-looking statements.

Information contained in forward-looking statements is based upon certain material assumptions that were applied in drawing a conclusion or making a forecast or projection, including management's perceptions of historical trends, current conditions and expected future developments, including the closing of the Acquisition, as well as other considerations that are believed to be appropriate in the circumstances, including the following: the Canadian economy will remain stable over the next 12 months; inflation will remain relatively low; interest rates will remain stable; conditions within the real estate market, including competition for acquisitions, will be consistent with the current climate; the Canadian capital markets will continue to provide the REIT with access to equity and/or debt at reasonable rates when required; Starlight Investments Ltd. will continue its involvement as asset manager of the REIT in accordance with its current asset management agreement; and the risks identified or referenced above, collectively, will not have a material impact on the REIT. While management considers these assumptions to be reasonable based on currently available information, they may prove to be incorrect.

The forward-looking statements made in this press release are dated, and relate only to events or information, as of the date of this press release. Except as specifically required by law, the REIT undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.

About the REIT

The REIT is an unincorporated, open-ended real estate investment trust established under the laws of the Province of Ontario.

The REIT focuses on a long-term strategy to generate stable cash distributions on a tax-efficient basis for unitholders. The REIT intends to actively look for opportunities to expand its asset base and increase its distributable cash flow through acquisitions of additional multi-suite residential rental properties across Canada, the United States and other jurisdictions where opportunities may arise. Additional information concerning the REIT is available at www.sedar.com.



SOURCE True North Apartment Real Estate Investment Trust


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