Correct Success: American Hotel Income Properties REIT LP Announces US$50 Million Strategic Investment by BentallGreenOak and Highgate & Amendments to its Corporate Credit Facility

Institutional Most popular Fairness Inventory providing to BentallGreenOak and Highgate
Enhances AHIP’s liquidity, reduces leverage and positions Firm for development alternatives
Extension of waivers and covenants on company credit score facility

All quantities in U.S. {dollars} until in any other case famous

VANCOUVER, BC, Jan. 28, 2021 /PRNewswire/ – American Lodge Earnings Properties REIT LP (“AHIP” or the “Firm“) (TSX: HOT.UN, TSX: HOT.U, TSX: HOT.DB.U) is happy to announce that BentallGreenOak Actual Property Advisors LP (“BentallGreenOak“) and Highgate Capital Investments, LP (“Highgate“) by HCI-BGO Victoria JV LP (the “Investor“), a three way partnership restricted partnership, have made an combination $50 million strategic funding (the “Funding“) in AHIP and its subsidiary, American Lodge Earnings Properties REIT Inc., (“AHIP REIT“), by the issuance of newly-created Sequence C most well-liked fairness inventory of AHIP REIT (the “Most popular Inventory“) and warrants to amass Items of AHIP (“Warrants“), on a non-public placement foundation. As a part of the Funding, the Investor has nominated two seasoned funding and trade professionals to AHIP’s Board of Administrators (“Board“).

The Funding gives a number of speedy strategic advantages to AHIP:

Validation of AHIP’s Enterprise: The Funding demonstrates the power of AHIP’s premium branded select-service resort portfolio and asset administration platform, and highlights that BentallGreenOak and Highgate, two main institutional buyers with vital expertise in actual property and hospitality investing, acknowledge the worth and development potential of AHIP.
Establishes Lengthy-Time period Strategic Unitholders: The addition of two well-capitalized strategic companions positions AHIP to pursue and capitalize on enticing acquisition alternatives.
Strengthens AHIP’s Stability Sheet: Proceeds from the funding will improve AHIP’s total liquidity and capital construction, with internet proceeds anticipated for use in the direction of speedy debt discount. For accounting functions, the Most popular Inventory shall be handled as $48.1 million in fairness, and the Warrants shall be recorded as a $1.9 million legal responsibility, on AHIP’s steadiness sheet. On account of the Funding, AHIP now has whole out there liquidity of roughly $75 million, up from roughly $40 million at September 30, 2020, whereas on the identical time lowering AHIP’s pro-forma internet debt-to-gross guide worth to 52.2%, in comparison with 56.2% at September 30, 2020.
Fairness Participation at Enticing Pricing: The train worth for the Warrants of $3.20 per unit (roughly C$4.10) represents a 30.5% premium to AHIP’s closing worth of C$3.14 on January 28, 2021, a 31.8% premium to AHIP’s 10-day quantity weighted common Canadian greenback buying and selling worth as of January 28, 2021.

“This funding illustrates the standard of our portfolio and technique, as acknowledged by two main institutional buyers within the hospitality house,” mentioned Jonathan Korol, CEO of AHIP. “The proceeds acquired will help us in strengthening our steadiness sheet, bettering our capital construction, and enhancing our capability to behave on development alternatives that will come up. BentallGreenOak and Highgate are aligned with our technique, and we’re excited to have established this partnership as we proceed to enhance on the short-term sector challenges from the COVID-19 pandemic and advance our portfolio’s development and money circulation goals.”

Mr. Korol additionally mentioned, “I’m additionally very happy to welcome Mark Van Zandt of BentallGreenOak and Mahmood Khimji of Highgate to AHIP’s Board of Administrators.”

Mark Van Zandt, Managing Companion of BentallGreenOak, mentioned, “We imagine AHIP’s premium branded select-service portfolio, beneath the management of this top quality administration staff, is properly positioned to outperform through the ongoing resort market restoration. We’re excited to associate with our associates at Highgate on this strategic funding and sit up for working with AHIP to realize the Firm’s development goals.”

Mahmood Khimji, Co-Founder and Managing Principal of Highgate, mentioned, “Highgate is thrilled to begin this partnership with AHIP, together with BentallGreenOak. AHIP’s choose service and prolonged keep portfolio, overseen by an exceptionally gifted administration staff, is well-positioned for a strong restoration as nationwide lodging fundamentals emerge from COVID-driven disruption. We sit up for partnering with Jonathan and the AHIP staff over the approaching years, and collaborating with the Firm within the pursuit of future development initiatives.”

TRANSACTION SUMMARY

Key phrases of the Funding embody:

The Investor acquired 50,00Zero Most popular Inventory (the “Bought Most popular Inventory“) which is perpetual and redeemable by AHIP, and shall be handled as fairness on AHIP’s steadiness sheet. Topic to sure phrases and situations, the Bought Most popular Inventory gives for an annual dividend of 8.00% each year for the primary three years after issuance, and, to the extent nonetheless excellent, will increase to 9.00% each year on the third anniversary of the issuance with additional escalations after the fifth anniversary of the issuance.
The Investor acquired 19,608,775 Warrants (the “Bought Warrants“) exercisable at any time previous to January 28, 2026 for models in AHIP (every a “Unit“) on the Toronto Inventory Trade (the “TSX“), at an train worth (the “Train Worth“) of $3.20 per Unit (roughly C$4.10), equal to 19.99% of the excellent Items of AHIP following the Funding on an as-exercised foundation. The Bought Warrants could solely be exercised by way of cashless train which is able to result in an exercised possession place of lower than 19.99%.

In reference to the Funding, the Investor entered into an investor rights settlement with AHIP offering for, amongst different issues, the proper to appoint two administrators to AHIP’s Board, customary registration rights, participation rights, and sure standstill and switch restriction rights together with a 24-month lockup on each the Bought Most popular Inventory and the Bought Warrants. With the addition of Mr. Van Zandt and Mr. Khimji, AHIP’s Board now consists of eight members.

Extra info relating to the Funding and the phrases of the Bought Most popular Inventory and Bought Warrants shall be included in a cloth change report back to be filed by AHIP on SEDAR at www.sedar.com. This information launch is simply a abstract of sure principal phrases of the Funding and is certified in its entirety by reference to the extra detailed info contained within the materials change report.

REVOLVING CREDIT FACILITY AND TERM LOAN UPDATE

On January 28, 2021, AHIP amended its $225 million company credit score facility (the “Facility“) with its lending syndicate. These amendments embody:

Waiver of key monetary covenants by December 31, 2021 and modified covenants by December 31, 2022;
Availability beneath the Facility fastened by December 31, 2021; and
Borrowings not topic to swap agreements will stay at LIBOR + 300 foundation factors with a minimal LIBOR steadiness of 0.25%.

Extra info relating to the Facility and its phrases shall be included in a cloth change report back to be filed by AHIP on SEDAR at www.sedar.com. This information launch is simply a abstract of sure principal phrases of the Facility and is certified in its entirety by reference to the extra detailed info contained within the materials change report.

TRANSACTION ADVISORS

CIBC Capital Markets and Deutsche Financial institution Securities Inc. acted as monetary advisors and Farris LLP and Womble Bond Dickinson (US) LLP acted as authorized advisors to AHIP. Latham & Watkins LLP and Davies Ward Phillips & Vineberg LLP acted as authorized advisors to BentallGreenOak and Highgate.

ADDITIONAL EARLY WARNING DISCLOSURE OF INVESTOR

BentallGreenOak and Highgate are making the Funding by the Investor, a three way partnership Delaware restricted partnership organized for functions of creating the Funding.

Pursuant to the subscription settlement with AHIP, the final associate of AHIP and AHIP REIT, the Investor subscribed for the Bought Warrants. Of the entire $50 million worth paid by the Investor for the Bought Most popular Inventory and the Bought Warrants, $1.9 million (roughly C$2.Four million) was allotted to the Bought Warrants (or C$0.12 per Bought Warrant). Every Bought Warrant initially entitles the Investor to buy one Unit on the Train Worth per underlying Unit. The Bought Warrants could also be exercised at any time previous to January 28, 2026.

Instantly previous to the Funding, the Investor and its associates owned no voting or fairness securities within the capital of AHIP. The Bought Warrants could solely be exercised by way of a cashless train whereby the in-the-money worth of a portion of any exercised Bought Warrants have to be utilized to fund the Train Worth for the steadiness of the exercised Bought Warrants. As of the date hereof, the Train Worth exceeds the present market worth of the Items and, consequently, the Investor just isn’t entitled to amass any Items on its train of the Bought Warrants. Nevertheless, if the Investor was entitled to, and did, train the entire Bought Warrants by paying the complete Train Worth in money, and never pursuant to a cashless train, the Investor and its associates would personal 19,608,755 Items, or roughly 19.99% of the presently excellent Items on {a partially} diluted foundation, after giving impact to such train.

The Investor intends to carry the Bought Most popular Inventory, Bought Warrants and any Items issued to the Investor on the train of the Bought Warrants for funding functions. Relying on market situations and different elements, together with AHIP’s enterprise and monetary situation, the Investor or its associates (together with BentallGreenOak and Highgate) could purchase extra securities of AHIP or its subsidiaries or eliminate some or the entire securities of AHIP or its subsidiaries that it owns at such time.

An early warning report with extra info in respect of the foregoing issues shall be filed and made out there on the System for Digital Doc Evaluation and Assessment (SEDAR) at www.sedar.com beneath AHIP’s profile. To acquire a duplicate of this report, you may additionally contact Rahim Ladha at (416) 681-6309. The Investor’s deal with is 870 seventh Avenue, 2nd Ground, New York, NY 10019.

NON-IFRS MEASURES

Sure non-IFRS monetary measures are included on this information launch, which incorporates internet debt-to-gross guide worth. This time period just isn’t a measure acknowledged beneath Worldwide Monetary Reporting Requirements (“IFRS“) and doesn’t have a standardized which means prescribed by IFRS. Actual property issuers usually check with internet debt-to-gross guide worth as a supplemental measure of economic situation.

Web debt-to-gross guide values shouldn’t be construed as an alternative choice to measurement decided in accordance with IFRS as an indicator of AHIP’s monetary situation. AHIP’s methodology of calculating internet debt-to-gross guide worth could differ from different issuers’ strategies and accordingly might not be akin to measures utilized by different issuers. For additional info, together with reconciliations of sure of those non-IFRS monetary measures to the closest comparable IFRS measure, please check with AHIP’s MD&A dated November 9, 2020, which is on the market on SEDAR at www.sedar.com and on AHIP’s web site at www.ahipreit.com.

FORWARD-LOOKING STATEMENTS

Sure statements on this information launch could represent “forward-looking info” inside the which means of relevant securities legal guidelines (often known as forward-looking statements). Ahead-looking info entails identified and unknown dangers, uncertainties and different elements, and will trigger precise outcomes, efficiency or achievements or trade outcomes to be materially totally different from any future outcomes, efficiency or achievements or trade outcomes expressed or implied by such forward-looking info. Ahead-looking info typically may be recognized by way of phrases and phrases similar to “anticipate”, “imagine”, “may”, “estimate”, “anticipate”, “really feel”, “intend”, “could”, “plan”, “predict”, “challenge”, “topic to”, “will”, “would”, and related phrases and phrases, together with references to assumptions. Among the particular forward-looking info on this information launch consists of, however just isn’t restricted to, statements with respect to: AHIP’s perception that the addition of BentallGreenOak and Highgate positions it to pursue and capitalize on enticing acquisition alternatives; proceeds from the Funding will improve AHIP’s total liquidity and capital construction, with internet proceeds anticipated for use in the direction of speedy debt discount; the remedy of the Most popular Inventory and the Warrants shall be fairness and a legal responsibility, respectively, for accounting functions; AHIP’s expectation of getting a strengthened steadiness sheet with whole out there liquidity of roughly $75 million and lowering its pro-forma internet debt-to-gross guide worth to 52.2%; the assumption that AHIP’s premium branded select-service portfolio is properly positioned to outperform throughout an ongoing resort market restoration within the U.S.; and AHIP’s acknowledged long-term goals.

Ahead-looking info relies on quite a lot of key expectations and assumptions made by AHIP, together with, with out limitation: AHIP will be capable to capitalize on enticing acquisition alternatives with the help from BentallGreenOak and Highgate; AHIP’s total liquidity and capital construction shall be enhanced, and its steadiness sheet strengthened, from the Funding; the Most popular Inventory and Warrants shall be handled for accounting functions as fairness and a legal responsibility, respectively; sector challenges and disruption arising from the COVID-19 pandemic are of a brief nature; there shall be a sustained restoration of AHIP’s portfolio in 2021 and there shall be a significant and sustained financial restoration within the U.S. and inside the U.S. resort trade total. Though the forward-looking info contained on this information launch relies on what AHIP’s administration believes to be cheap assumptions, AHIP can’t guarantee buyers that precise outcomes shall be per such info.

Ahead-looking info is supplied for the aim of presenting details about administration’s present expectations and plans regarding the long run and readers are cautioned that such statements might not be acceptable for different functions. Ahead-looking info entails vital dangers and uncertainties and shouldn’t be learn as ensures of future efficiency or outcomes as precise outcomes could differ materially from these expressed or implied in such forward-looking info. These dangers and uncertainties embody, amongst different issues, dangers associated to: AHIP won’t be able to capitalize on enticing acquisition alternatives regardless of the help of BentallGreenOak and Highgate; the Funding doesn’t meaningfully improve AHIP’s total liquidity and capital construction, nor strengthen its steadiness sheet; the Most popular Inventory just isn’t handled for accounting functions as fairness; sector challenges and disruptions arising from the COVID-19 pandemic are usually not of a brief nature; there is not going to be a sustained restoration of AHIP’s portfolio in 2021 and a significant and sustained financial restoration within the U.S. and inside the U.S. resort trade total could also be delayed or muted; and AHIP could not obtain its acknowledged long-term goals. Administration believes that the expectations mirrored in forward-looking info contained herein are based mostly upon cheap assumptions and data presently out there; nonetheless, administration can provide no assurance that precise outcomes shall be per this forward-looking info. Extra details about dangers and uncertainties is contained in AHIP’s MD&A dated November 9, 2020 and annual info type for the yr ended December 31, 2019, copies of which can be found on SEDAR at www.sedar.com.

The forward-looking info contained herein is expressly certified in its entirety by this cautionary assertion. Ahead-looking info displays administration’s present beliefs and relies on info presently out there to AHIP. The forward-looking info is made as of the date of this information launch and AHIP assumes no obligation to replace or revise such info to mirror new occasions or circumstances, besides as could also be required by relevant legislation.

ABOUT AMERICAN HOTEL INCOME PROPERTIES REIT LP

American Lodge Earnings Properties REIT LP (TSX: HOT.UN, TSX: HOT.U, TSX: HOT.DB.U), or AHIP, is a restricted partnership fashioned to spend money on resort actual property properties throughout the USA. AHIP’s 78 premium branded, select-service motels are positioned in secondary metropolitan markets that profit from numerous and steady demand. AHIP motels function beneath manufacturers affiliated with Marriott, Hilton, IHG and Alternative Accommodations by license agreements. The Firm’s long-term goals are to construct on its confirmed observe document of profitable funding, ship month-to-month U.S. greenback denominated distributions to unitholders, and generate worth by the continued development of its diversified resort portfolio. Extra info is on the market at www.ahipreit.com.

ABOUT BENTALLGREENOAK

BentallGreenOak is a number one, world actual property funding administration advisor and a globally-recognized supplier of actual property companies. BentallGreenOak serves the pursuits of greater than 750 institutional shoppers with roughly $50 billion of belongings beneath administration (as of September 30, 2020) and experience within the asset administration of workplace, industrial, multi-residential, retail, and resort property throughout the globe. BentallGreenOak has workplaces in 24 cities throughout twelve nations with deep, native information, expertise, and intensive networks within the areas the place we spend money on and handle actual property belongings on behalf of our shoppers. BentallGreenOak is part of SLC Administration, which is the institutional options and conventional asset administration enterprise of Solar Life.

The belongings beneath administration proven above embody actual property fairness and mortgage investments managed by the BentallGreenOak group of firms and their associates.

For extra info, please go to www.bentallgreenoak.com.

ABOUT HIGHGATE

Highgate is a fully-integrated actual property funding and hospitality administration firm with over $10 billion of motels beneath administration. Highgate has a longstanding observe document of working belongings for the trade’s largest REITs, non-public fairness corporations, institutional funds and personal buyers. Highgate is an energetic investor in key gateway markets, and operates greater than 160 motels and roughly 45,00Zero rooms all over the world.

For extra info, please go to www.highgate.com.