Lanesborough REIT gets approval to extend, amend 7.5% convertibles

By Angela McDaniels

Tacoma, Wash., Oct. 28 - Lanesborough Real Estate Investment Trust received holder approval to amend the terms of its C$25,424,000 of outstanding 7.5% convertible redeemable subordinated debentures, according to a company news release.

Holders voted to accept the amendments at a meeting on Oct. 27.

According to a previous news release, the company does not have the cash resources to repay the convertibles on their scheduled maturity date, Dec. 31, 2011. Lanesborough said its operations have seen recent improvement, but all available cash resources have been used to fund capital expenditures on its property portfolio and to service current debt.

The company received approval to

• Extend the maturity date to Feb. 28, 2015;

• Increase the interest rate to 9.5%;

• Eliminate the ability of the holders to convert the debentures into trust units;

• Amend the redemption features;

• Eliminate the ability of Lanesborough to repay the principal amount with units;

• Eliminate the ability of Lanesborough to pay interest with freely tradable units; and

• Improve the security on the convertibles so that they are secured by a registration under the Personal Property Security Act (Manitoba) to and in favor of the indenture trustee on all of Lanesborough's property and assets, subject to senior debt and permitted encumbrances.

Lanesborough entered into a supplemental trust indenture with the trustee for the debentures, CIBC Mellon Trust Co., effecting the amendments.

National Bank Financial Inc. was the solicitation agent.

Lanesborough is a REIT based in Winnipeg, Man.

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