– Transaction reduces the Trust's potential unit dilution by 8.2% by retiring in-the-money warrants and replacing them with out-of-the-money warrants –

TORONTO, April 15, 2024 /CNW/ - DRI Healthcare Trust (TSX: DHT.UN) (TSX: DHT.U) (the "Trust") announces the refinancing of its US$114,760,000 aggregate principal amount of Series A and Series B preferred securities and 6,369,180 in-the-money warrants (collectively, the "Existing Securities").

As a result of the refinancing, holders of the Existing Securities will receive US$135,202,000 of new Series C preferred securities and 1,749,996 new warrants having an exercise price representing a 20% premium to the five day volume-weighted average price of the Trust's units. The Existing Securities will be canceled upon completion of the refinancing, with holders entitled to receive accrued and unpaid interest on the Series A and Series B preferred securities up to and excluding such date.

The reduction in the number of warrants outstanding will reduce the Trust's potential unit dilution upon exercise by 4.6 million units, or 8.2% of current units outstanding.

Financial Terms

The Series C preferred securities will be unsecured, subordinated debt securities of the Trust and have a principal amount of US$135,202,000. The Series C preferred securities will have substantially the same terms as the Series A preferred securities, but will mature in April 2074. The Series C preferred securities will initially pay cash interest at a rate of 7.50% per annum on the principal amount of the Series C preferred securities outstanding, payable semi-annually on April 30 and October 31 of each year. The Series C preferred securities will not be redeemable by the Trust prior to April 30, 2029, except in the event of a change of control of the Trust.

The interest rate on the Series C preferred securities will increase to 10% per annum if any of the Series C preferred securities are outstanding on April 30, 2029, and will be subject to an annual increase of 1.5% per annum if outstanding on each one year anniversary of such date, up to a specified cap.

The new warrants will entitle the holders thereof to acquire one Trust unit for an exercise price of US$15.00 at any time until the expiry of the warrants five years from date of issue. The warrant exercise price represents a 20% premium to the volume-weighted average price of the Trust's units for the five trading days ending April 12, 2024.

The refinancing of the Securities is conditional upon consent of the holders of the Existing Securities and other customary conditions, including the approval of the Toronto Stock Exchange for the issuance of the new warrants.