Melcor REIT Announces Redemption of it's 5.10% Convertible Unsecured Subordinated Debentures

Melcor Real Estate Investment Trust (“Melcor REIT” or the “REIT“) (TSX: MR.UN) today announced that it has issued a notice of redemption to holders of Melcor REIT’s 5.10% convertible unsecured subordinated debentures having a maturity date of December 31, 2024 (the “Debentures“), representing a redemption of all of the currently outstanding Debentures.

DEBENTURE REDEMPTION

The Debentures will be redeemed on December 12, 2024 (the “Redemption Date“) in accordance with their terms. The Debentures will be redeemed at a redemption amount of $1,023.05 for each $1,000 principal amount of Debentures, being equal to the aggregate of (i) $1,000, and (ii) all accrued and unpaid interest thereon up to but excluding the Redemption Date (calculated to be $23.05 per $1,000 principal amount of Debentures). As of the close of trading on November 7, 2024, the aggregate principal amount of the Debentures outstanding was $46.0 million.

Prior to the redemption of the Debentures, each holder will have the right to convert their Debentures into trust units (“Units“) at a conversion price of $8.90 per Unit (the “Conversion Price“) at any time on or prior to December 11, 2024. The required form of Conversion Notice will be available on SEDAR+ at www.sedarplus.ca, and should be submitted to Odyssey Trust Company, as follows:

A holder electing to convert the principal amount of their Debentures will receive approximately 112.3596 Units for each $1,000 principal amount of Debentures converted. No fractional Units will be issued on conversion but, in lieu thereof, the REIT shall pay the cash equivalent thereof determined on the basis of the current market price of the Units on the conversion date, as applicable (less any tax required to be deducted, if any). All holders of Debentures who fail to deliver a notice of conversion on or prior to December 11, 2024 shall have their Debentures redeemed for cash on the Redemption Date. Beneficial holders of Debentures who wish to convert their Debentures into Units should consult with their financial institutions as soon as possible and allow for sufficient time to complete the conversion process.

In accordance with the redemption and repayment of the Debentures, the REIT expects that the Debentures will be delisted from the Toronto Stock Exchange (the “TSX”) on or shortly following such redemption and repayment, subject to the REIT obtaining TSX approval in the ordinary course.

LENDER CONSENT AND WAIVER

In connection with the amended and restated credit agreement among the Melcor REIT Limited Partnership (the “REIT LP”), as borrower, ATB Financial, as administrative agent, lead arranger, syndication agent, sole bookrunner and lender, and Canadian Western Bank, as lender (together with ATB Financial, the “Lenders”), dated May 27, 2024, as amended by a first amending agreement dated August 29, 2024, ‎the Lenders have provided their consent (the “Consent”) in connection with: (i) the previously announced arrangement agreement (“Arrangement Agreement”) among the REIT, Melcor Developments Ltd. and Melcor REIT GP Inc. and (ii) the advance of funds pursuant to the previously announced Backstop Loan Agreement among the REIT, Melcor REIT Limited Partnership and Melcor Developments Ltd. (the “Backstop Loan Agreement“). The Lenders and Agent have also agreed to waive any breach, failure to comply, default or event of default that may arise as a result of the transactions contemplated by the Arrangement Agreement, the Backstop Loan Agreement and any transactions or actions taken in connection with the transactions contemplated by the Arrangement Agreement and the Backstop Loan Agreement (together with the Consent, the “Consent and Waiver“).

About Melcor REIT

Melcor REIT is an unincorporated, open-ended real estate investment trust. Melcor REIT owns, acquires, manages and leases quality retail, office and industrial income-generating properties in western Canadian markets. Its portfolio is currently made up of interests in 36 properties representing approximately 3.072 million square feet of gross leasable area located across Alberta and in Regina, Saskatchewan; and Kelowna, British Columbia.

Forward Looking Statement Cautions:

This news release includes forward-looking information within the meaning of applicable ‎Canadian securities laws. In some cases, forward-looking information can be identified by the ‎use of words such as “may”, “will”, “should”, “expect”, “intend”, “plan”, “anticipate”, “believe”, ‎‎”estimate”, “predict”, “potential”, “continue”, and by discussions of strategies that involve risks ‎and uncertainties, certain of which are beyond the REIT’s control. In this news release, forward-looking information includes, among other things, the timing of the redemption of the Debentures and the delisting of the Debentures from the TSX. The forward-looking information is based on certain key expectations and assumptions made by the REIT, and although management of the REIT believes that the expectations reflected in the forward-looking information are reasonable, there can be no assurance that any transaction will occur or that it will occur on the timetable or on the terms and conditions contemplated in this news release. Readers are cautioned not to place undue reliance on forward-looking information. Additional information on these and other factors that could affect the REIT are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR+ at www.sedarplus.ca.

By its nature, such forward-looking information necessarily involves known and unknown risks ‎and uncertainties that may cause actual results, performance, prospects and opportunities in ‎future periods of the REIT to differ materially from those expressed or implied by ‎such forward-looking statements. Furthermore, the forward-looking statements contained in this ‎news release are made as of the date of this news release and neither the REIT nor ‎any other person assumes responsibility for the accuracy and completeness of any forward-‎looking information, and no one has any obligation to update or revise any forward-looking ‎information, whether as a result of new information, future events or such other factors which ‎affect this information, except as required by law.

For further information, please contact:

Investor Relations:

Tel: 1.780-945-4795
ir@melcor.ca

Unitholder Questions:

Laurel Hill Advisory Group
North America (toll-free): 1-877-452-7184
Outside North America: 1-416-304-0211
Email: assistance@laurelhill.com.