/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED
STATES. ALL AMOUNTS IN UNITED
STATES ("U.S.") DOLLARS./
TORONTO, Oct. 31, 2018 /CNW/ - Starlight U.S. Multi-Family
(No. 5) Core Fund (TSXV: STUS.A) (TSXV: STUS.U) (the "Fund")
announced today that it has strategically repositioned its debt
structure through the refinancing of the Fund's outstanding debt
secured by its properties. The Fund has fixed the interest rate on
approximately 80% of its mortgage financings while reducing the
Fund's weighted average interest rate on its mortgages by
approximately 52 basis points and extended the weighted average
term to maturity to 6.1 years. The refinancing of the Fund's
indebtedness is comprised of entering into the mortgage refinancing
and by amending the Fund's unsecured credit facility as further
described below.
Mortgage Refinancing
On October 31, 2018, the Fund
entered into an agreement for a new pooled mortgage secured by all
23 properties of the Fund for total proceeds of approximately
U.S.$800.5M which is comprised of
three tranches (the "Mortgage Refinancing") as follows:
- U.S.$400.2M six year tranche with
interest fixed at 3.92% and interest only payments for five
years;
- U.S.$240.2M seven year tranche
with interest fixed at 3.95% and interest only payments for six
years; and
- U.S.$160.1M five year tranche
with interest at the U.S. 30-day London Interbank Offered Rate
("LIBOR") + 1.15% and interest only payments for three years.
The Mortgage Refinancing is secured by all of the Fund's
properties and carries a weighted average interest rate of 3.84%
(based on LIBOR at October 31, 2018)
and a weighted average term to maturity of 6.1 years.
"The Fund's debt refinancing represents a significant
milestone for the Fund providing the security of a fixed-rate
financing structure as well as a significant reduction to the
Fund's weighted average interest rate on its mortgages," commented
Martin Liddell, the Fund's Chief
Financial Officer
Unsecured Credit Facility
On October 31, 2018, the Fund
entered into a third amending agreement for its unsecured credit
facility (the "Unsecured Credit Facility") with a Canadian
chartered bank which allows the Fund to borrow up to
U.S.$120.0M at an initial rate of
3.50% over LIBOR and a one-year term. The Unsecured Credit Facility
carries an option to increase the total borrowing to
U.S.$130.0M between April 30, 2019 and July
31, 2019.
Repayment of Existing Mortgages Payable and Credit
Facility
The Fund has drawn an initial amount of U.S.$120.0M on the Unsecured Credit Facility which
will be used, in combination with the proceeds from the Mortgage
Refinancing, to repay the existing mortgages payable of
approximately U.S.$880.2M and the
amounts outstanding under the Fund's credit facility of
U.S.$18.3M.
About Starlight U.S. Multi-Family (No. 5) Core Fund
The Fund is a limited partnership formed under the Limited
Partnerships Act (Ontario) for
the primary purpose of indirectly acquiring, owning and operating a
portfolio of diversified income producing rental properties in the
U.S. multi-family real estate market. The Fund currently owns 23
properties, consisting of 7,289 suites with an average year of
completion of 2012.
For the Fund's complete consolidated financial statements and
management's discussion and analysis ("MD&A") for the three and
six months ended June 30, 2018 and
any other information relating to the Fund, please visit
www.sedar.com. Further details regarding the Fund's unit
performance and distributions, market conditions where the Fund's
properties are located, performance by the Fund's properties and a
capital investment update are also available in the Fund's
August 2018 Newsletter which is
available on the Fund's profile at www.starlightus.com.
Forward-looking Statements
Certain statements contained in this press release constitute
forward-looking information within the meaning of Canadian
securities laws. Forward-looking information is provided for the
purposes of assisting the reader in understanding the Fund's
financial performance, financial position and cash flows as at and
for the periods ended on certain dates and to present information
about management's current expectations and plans relating to the
future and readers are cautioned that such statements may not be
appropriate for other purposes. Forward-looking information may
relate to future results, acquisitions, performance, achievements,
events, prospects or opportunities for the Fund or the real estate
industry and may include statements regarding the financial
position, business strategy, acquisitions, budgets, litigation,
projected costs, capital expenditures, financial results, occupancy
levels, AMR, taxes, the Fund's use of its normal course issuer bid,
and plans and objectives of or involving the Fund. In some
cases, forward-looking information can be identified by terms such
as "may", "might", "will", "could", "should", "would", "occur",
"expect", "plan", "anticipate", "believe", "intend", "seek", "aim",
"estimate", "target", "goal", "project", "predict", "forecast",
"potential", "continue", "likely", "schedule", or the negative
thereof or other similar expressions concerning matters that are
not historical facts.
Forward-looking information necessarily involves known and
unknown risks and uncertainties, which may be general or specific
and which give rise to the possibility that expectations,
forecasts, predictions, projections or conclusions will not prove
to be accurate, assumptions may not be correct and objectives,
strategic goals and priorities may not be achieved. A variety of
factors, many of which are beyond the Fund's control, affect the
operations, performance and results of the Fund and its business,
and could cause actual results to differ materially from current
expectations of estimated or anticipated events or
results.
Information contained in forward-looking information is based
upon certain material assumptions that were applied in drawing a
conclusion or making a forecast or projection, including
management's perceptions of historical trends, current conditions
and expected future developments, as well as other considerations
that are believed to be appropriate in the circumstances, including
the following: the inventory of multi-family real estate
properties; the availability of properties for acquisition and the
price at which such properties may be acquired; the availability of
mortgage financing and current interest rates; the extent of
competition for properties; the population of multi-family real
estate market participants; assumptions about the markets in which
the Fund operates; the ability of Starlight Investments US AM Group
LP, the manager of the Fund, to manage and operate the properties;
the global and North American economic environment; foreign
currency exchange rates; and governmental regulations or tax
laws.
Although the Fund believes the expectations reflected in such
forward-looking information are reasonable and represent the Fund's
projections, expectations and beliefs at this time, such
information involves known and unknown risks and uncertainties
which may cause the Fund's actual performance and results in future
periods to differ materially from any estimates or projections of
future performance or results expressed or implied by such
forward-looking information.
Important factors that could cause actual results to differ
materially from the Fund's expectations include, among other
things, the availability of suitable properties for purchase by the
Fund, the availability of mortgage financing for such properties,
and general economic and market factors, including interest rates,
business competition and changes in government regulations or in
tax laws. The reader is cautioned to consider these and other
factors, uncertainties and potential events carefully and not to
put undue reliance on forward-looking information as there can be
no assurance that actual results will be consistent with such
forward-looking information.
The forward-looking information included in this press release
relate only to events or information as of the date on which the
statements are made in this press release. Except as specifically
required by applicable Canadian law, the Fund undertakes no
obligation to update or revise publicly any forward-looking
information, whether as a result of new information, future events
or otherwise, after the date on which the statements are made or to
reflect the occurrence of unanticipated events.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
SOURCE Starlight U.S. Multi-Family (No. 5) Core Fund