On February 27, 2013, InnVest issued $115.0 million of Series G - 5.75% convertible debentures with proceeds primarily used to redeem InnVest's $75.0 million Series B - 6.00% convertible debentures on April 1, 2013. Incremental proceeds will be used to fund InnVest's capital investment program.
As of March 31, 2013, InnVest had $93.3 million of cash (including restricted cash), $75.0 million of which was applied to redeem the Series B Debentures on April 1, 2013. As at the end of the quarter, InnVest has $36.8 million of capacity on its credit facility.
Pro forma the redemption of its Series B - 6.0% convertible debentures, InnVest's leverage at March 31, 2013 including convertible debentures was 66.5% (46.0% excluding convertible debentures).
InnVest has no debt maturities until March of 2014 and a weighted average interest rate of 5.6%.
INCOME TAX DEFERRAL
For 2013, InnVest estimates that the non-taxable portion of the distributions made to unitholders during the year will approximate 30% (2012 - 40%). This estimate may change materially based on InnVest's asset disposition activity during the year.
Uncertainty in the world economy continues to impact the lodging industry. InnVest's broad, diversified portfolio remains a key advantage in the current environment.
Canadian lodging industry fundamentals remain favourable, with improving demand expectations through the balance of the year.
Over the next two years, InnVest expects to divest of low-yielding assets and reinvest proceeds generated to undertake an extensive capital program to enhance its product offering at a number of select hotels. These targeted investments are expected to improve the portfolio's competitive positioning and operating performance through increased occupancies and rates. An enhanced product, coupled with improving demand and constrained new supply should enable InnVest to realize cash flow growth.
NOMINEES FOR ELECTION TO BOARD OF TRUSTEES
InnVest will be hosting its annual and special meeting of unitholders (the "Meeting") on June 5, 2013 in Toronto. At the Meeting, it is proposed that five Trustees be elected by the Unitholders so that there are a total of seven Trustees. There are presently four elected Trustees and a total of six Trustees. Two of the current Trustees, Frank Anderson and Morton G. Gross, are seeking re-election at the Meeting. Michael P. Kitt and Minhas N. Mohamed are not seeking re-election. InnVest's Board of Trustees has nominated three new nominees, Edward W. Boomer, Laurence S. Geller and Fernand Perreault. The new nominees have extensive backgrounds in the real estate and hospitality industries and are expected to contribute significantly to InnVest's strategy and corporate governance in the years ahead.
Information about all nominees will be included in InnVest's management information circular for the Meeting which will be mailed to unitholders of record as of April 30, 2013 early next week and will thereafter be made available on the Canadian Securities Administrators' System for Electronic Document Analysis and Retrieval ("SEDAR") located at www.sedar.com and on InnVest's website at www.innvestreit.com.
QUARTERLY CONFERENCE CALL
Management will host a conference call on Friday May 10, 2013 at 11:00 a.m. Eastern time to discuss the performance of InnVest. Investors are invited to access the call by dialing 416-340-8018 or 1-866-223-7781. You will be required to identify yourself and the organization on whose behalf you are participating. A recording of this call will be made available May 10th, beginning at 1:00 pm through to May 24th, 2013. To access the recording please call 905-694-9451 or 1-800-408-3053 and use the reservation number 8214798#.
Statements contained in this press release that are not historical facts are forward-looking statements which involve risk and uncertainties which could cause actual results to differ materially from those expressed in the forward-looking statements. Among the key factors that could cause such differences are real estate investment risks, hotel industry risks, competition and the status of InnVest REIT as a REIT for Canadian federal income tax purposes in any year. These and other factors are discussed in InnVest REIT's annual information form for the year ended December 31, 2012, which is available at www.sedar.com. InnVest REIT disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required to do so by applicable securities law.
InnVest Real Estate Investment Trust is an unincorporated open-ended real estate investment trust which owns a portfolio of 135 hotels across Canada representing approximately 18,000 guest rooms operated under internationally recognized brands. InnVest also holds a 50% interest in Choice Hotels Canada Inc., one of the largest franchisors of hotels in Canada.
InnVest's units and convertible debentures trade on the Toronto Stock Exchange (the "TSX") under the symbols INN.UN, INN.DB.C, INN.DB.D, INN.DB.E, INN.DB.F and INN.DB.G.
InnVest Real Estate Investment Trust
Executive Director, Investor Relations
(905) 206-7114 (FAX)
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