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Press release from Marketwire

Chartwell Announces Increase to Bought Deal Offering of Convertible Unsecured Subordinated Debentures

Thursday, February 16, 2012

Chartwell Announces Increase to Bought Deal Offering of Convertible Unsecured Subordinated Debentures08:52 EST Thursday, February 16, 2012MISSISSAUGA, ONTARIO--(Marketwire - Feb. 16, 2012) -NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATESChartwell Seniors Housing Real Estate Investment Trust (TSX:CSH.UN) ("Chartwell") announced today that as a result of strong investor demand for its public offering of 5.7% convertible unsecured subordinated debentures due March 31, 2018 announced on February 15, 2012 (the "Debentures"), the size of the Debenture offering has been increased by $20 million to $120 million. The terms of the Debentures, as described below, will otherwise remain the same, as will the size of the over-allotment option.The Debentures will bear interest at a rate of 5.7% per annum payable semi-annually on March 31 and September 30 (commencing September 30, 2012). The Debentures will be convertible at the option of the holder in certain circumstances into Units at a price of $11.00 per Unit. The offering is being underwritten, on a bought deal basis, by a syndicate of underwriters led by RBC Capital Markets. Chartwell has granted the underwriters an over-allotment option of $15 million, which is exercisable, in whole or in part, at any one time up to 30 days after closing of the Debenture offering, on the same terms as outlined above. Chartwell will, by February 22, 2012, file with the securities regulatory authorities in each of the provinces of Canada a preliminary short form prospectus relating to the issuance the Debentures. The closing of the offering is expected to occur on or before March 9, 2012. Chartwell intends to use the proceeds of the Debenture offering, net of the underwriters' fee and offering expenses attributable thereto, as follows: (a) approximately $78 million to redeem all of Chartwell's issued and outstanding convertible unsecured subordinated debentures, which mature on May 1, 2012, including any accrued and unpaid interest; (b) approximately $37 million to repay a portion of the outstanding balance under Chartwell's operating facility; and (c) the remainder, if any, for general trust purposes.DEBT AND LIQUIDITYChartwell's pro forma debt to gross book value ratio, including the acquisition of Chartwell's interest in the Maestro portfolio (as announced on February 15, 2012), is estimated to be approximately 56.0%, excluding the Debentures, and approximately 59.0% including theDebentures (based on the increased principal amount and the intended use of proceeds, as described above). Chartwell's debt level will thus be approximately equal to its reported leverage as at September 30, 2011 of 58.9% (after taking into consideration the acquisition by Chartwell from ING of its 50% interest in 15 properties in the United States on November 1, 2011, which were previously jointly owned with Chartwell). This does not reflect the impact of completing a U.S. disposition program which, if successfully completed, is expected to lower Chartwell's overall debt ratio to be within the range of its target debt ratio of 55%.In addition to a $210.4 million bridge facility, Chartwell also currently has approximately $7 million of cash on hand and will have approximately $70 million of availability on its $85 million operating line, as management expects that approximately $37 million of the proceeds from the Debentures will be initially used to reduce the balance outstanding on Chartwell's credit facility. Management believes that this liquidity position and the amount of incurred debt are at levels that allow Chartwell to continue to comfortably meet current obligations and will continue to allow Chartwell to pursue future growth opportunities as they become available.To view the chart associated with this press release, please visit the following link: http://media3.marketwire.com/docs/csh216chart.pdf.ABOUT CHARTWELLChartwell is a real estate investment trust that owns and operates a complete range of seniors housing communities from independent supportive living through assisted living to long term care. It is one of the largest participants in the seniors housing business in North America. Chartwell's aim is to capitalize on the strong demographic trends present in its markets to maximize the value of its existing portfolio of seniors housing communities, and prudently grow both internally and through accretive acquisitions.Chartwell's Distribution Reinvestment Plan (DRIP) allows Unitholders to have their monthly cash distributions used to purchase units without incurring commission or brokerage fees, and receive bonus units equal to 3% of their monthly cash distributions. More information can be obtained at www.chartwellreit.ca.FORWARD LOOKING INFORMATIONThis press release contains forward-looking information that reflect the current expectations of management about the future results, performance, achievements, prospects or opportunities for Chartwell and the seniors housing industry. These statements generally can be identified by use of forward-looking words such as "may", "will", "expect", "estimate", "anticipate", "believe", "project", "should" or "continue" or the negative thereof or similar variations. Forward-looking statements are based upon a number of assumptions and are subject to a number of known and unknown risks and uncertainties, many of which are beyond Chartwell's control that could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking statements.While we anticipate that subsequent events and developments may cause our views to change, we do not have an intention to update this forward-looking information, except as required by applicable securities laws. This forward-looking information represents our views as of the date of this press release and such information should not be relied upon as representing our views as of any date subsequent to the date of this document. We have attempted to identify important factors that could cause actual results, performance or achievements to vary from those current expectations or estimated expressed or implied by the forward-looking information. However, there may be other factors that cause results, performance or achievements not to be as expected or estimated and that could cause actual results, performance or achievements to differ materially from current expectations. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those expected or estimated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. These factors are not intended to represent a complete list of the factors that could affect us. See "Risks and Uncertainties" in our MD&A and risk factors highlighted in materials filed with the securities regulatory authorities in Canada from time to time, including but not limited to our most recent annual information form.FOR FURTHER INFORMATION PLEASE CONTACT: Brent BinionsChartwell Seniors Housing REITChief Executive Officer(905) 501-4703(905) 501-9107 (FAX)bbinions@chartwellreit.caORVlad VolodarskiChartwell Seniors Housing REITChief Financial Officer(905) 501-4709(905) 501-4710 (FAX)vvolodarski@chartwellreit.cawww.chartwellreit.ca