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Press release from CNW Group

KEYreit mails circular in connection with subsequent acquisition transaction and announces convertible debenture conversion mechanics

Wednesday, May 29, 2013

KEYreit mails circular in connection with subsequent acquisition transaction and announces convertible debenture conversion mechanics

16:37 EDT Wednesday, May 29, 2013

TORONTO, May 29, 2013 /CNW/ - KEYreit (TSX: KRE.UN) has mailed the management information circular related to the special meeting of unitholders of KEYreit to be held on June 26, 2013 at 10:00 am (Toronto time) for the purpose of approving the subsequent acquisition transaction which will allow Plazacorp Retail Properties Ltd. (TSXV: PLZ) ("Plazacorp") to acquire all of the units of KEYreit (the "Units") not previously acquired by Plazacorp.  The full details of the subsequent acquisition transaction are contained in the circular, which is available on KEYreit's website at www.keyreit.com and at www.sedar.com.

Concurrently with the completion of the subsequent acquisition transaction, Plazacorp, KEYreit and CIBC Mellon Trust Company will enter into a supplemental indenture pursuant to which the 7.75% convertible unsecured subordinated debentures due December 31, 2014 (the "2009 Debentures"), the 8.00% convertible unsecured debentures due December 31, 2016 (the "2011 Debentures") and the 7.00% convertible unsecured debentures due December 31, 2017 (the "2012 Debentures" and, together with the 2009 Debentures and the 2011 Debentures, the "Debentures") will become obligations of Plazacorp in accordance with the terms of their respective indentures.

At the same time, the Debentures will cease to be convertible into Units and will instead be convertible into an amount of cash and common shares of Plazacorp ("Plazacorp Shares") that a holder of Debentures would have been entitled to receive if, on the date of the subsequent acquisition transaction, it had been the registered holder of the number of Units which it was entitled to acquire upon the exercise of its conversion right. Accordingly, each $1,000 principal amount of the 2009 Debentures will be convertible into $117.25 in cash and 188 Plazacorp Shares, each $1,000 principal amount of the 2011 Debentures will be convertible into $99.76 in cash and 169 Plazacorp Shares and each $1,000 principal amount of the 2012 Debentures will be convertible into $112.76 in cash and 190 Plazacorp Shares.  The amount of cash into which the Debentures will be convertible is based on the maximum cash consideration available under the subsequent acquisition transaction and assuming full conversion of all the Debentures as of the date of the subsequent acquisition transaction.

ABOUT KEYreit

KEYreit is Canada's premier small-box retail property owner with 227 properties in nine provinces across Canada. KEYreit's properties are well located and geographically diverse across Canada with the majority of all properties containing long-term quadruple net leases.

To find out more about KEYreit, visit our website at www.keyreit.com.

CAUTIONARY STATEMENTS REGARDING FORWARD LOOKING INFORMATION

This press release contains certain information or statements that may constitute forward-looking information within the meaning of securities laws, which reflect the current view of KEYreit with respect to KEYreit's objectives, plans, goals, strategies, future growth, results of financial and operating performance and business prospects and opportunities. In some cases, forward-looking information can be identified by the use of terms such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "forecast", "predict", "potential", "continue" or other similar expressions concerning matters that are not historical facts. Forward-looking information should not be read as guarantees of future events, performance or results, and will not necessarily be accurate indications of whether, or the times at which, such events, performance or results will be achieved. All of the statements and information in this press release containing forward-looking information are qualified by these cautionary statements.

Forward-looking statements are based on information available at the time they are made, underlying estimates and assumptions made by management and management's good faith belief with respect to future events, performance and results, and are subject to inherent risks and uncertainties surrounding future expectations generally which could cause actual results to differ materially from what is currently expected. Such risks and uncertainties include, but are not limited to, reliance on key tenants, risks associated with investment in real property, competition, reliance on key personnel, financing and refinancing risks, distributions, environmental matters, tenant risks, risks related to current economic conditions and other risk factors more particularly described in KEYreit's most recent Annual Information Form available on SEDAR at www.sedar.com. Additional risks and uncertainties not presently known to KEYreit or that KEYreit currently believes to be less significant may also adversely affect KEYreit.

KEYreit cautions readers that the list of factors is not exhaustive and that should certain risks or uncertainties materialize, or should underlying estimates or assumptions prove incorrect, actual events, performance and results may vary significantly from those expected. There can be no assurance that the actual results, performance, events or activities anticipated by KEYreit will be realized or, even if substantially realized, that they will have the expected consequences to, or effect on, KEYreit. The reader should not place undue importance on forward-looking information and should not rely upon this information as of any other date.

KEYreit disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required under applicable securities laws.


SOURCE: KEYreit

For further information:

Floriana Cipollone (Chief Financial Officer) at (416) 848-4583

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