DRI Healthcare Trust Announces Preferred Securities Refinancing

Executive Summary

• DRI Healthcare Trust entered into subscription agreements to refinance its 7.50% Series C preferred securities by issuing C$108.7 million of convertible unsecured subordinated debentures.
• The new debentures mature on 28 Feb 2031, bear interest at 5.75%, and are convertible at C$21.99 per unit (≈30 % premium to market).
• The refinancing extends the maturity profile by up to two years, reduces interest costs, and enhances financial flexibility for growth initiatives.

Key Details

• Transaction Structure: Private placement of convertible unsecured subordinated debentures (“Debentures”) in exchange for existing preferred securities; no cash consideration paid by holders.
• Principal Amount: C$108,723,000 aggregate principal of Debentures issued to EdgePoint Wealth Management Inc. and Alberta Investment Management Corporation (AIMCo).
• Remaining Preferred Securities: After the transaction, US$35.58 million of the original preferred securities will remain outstanding.
• Interest Rate: 5.75% per annum, payable semi‑annually in arrears.
• Maturity: 28 Feb 2031; not redeemable before 28 Feb 2029.
• Redemption Terms:
• 28 Feb 2029 – 28 Feb 2030: Redeemable at DRI’s option if TSX VWAP over the prior 20‑day period ≥125% of the conversion price (C$21.99).
• On/after 28 Feb 2030 and before maturity: Redeemable at par plus accrued interest at DRI’s option.
• Conversion Feature: Holders may convert Debentures into units of DRI Healthcare at C$21.99 per unit, representing a 30% premium to the reference market price.
• Hold Period: Four months and one day from issuance, in accordance with Canadian securities laws.
• Closing Date: Expected on or about 19 Mar 2026, subject to TSX approval and customary closing conditions.
• Placement Agent: Scotia Capital Inc., acting as exclusive placement agent.
• Strategic Rationale (CEO Quote): “The refinancing being announced today meaningfully extends the maturity profile of our existing debt and lowers interest rate costs, thereby enhancing our financial flexibility to support the execution of our growth strategy.” – Ali Hedayat, CEO

Notable Quotes

• Ali Hedayat, Chief Executive Officer: “The refinancing being announced today meaningfully extends the maturity profile of our existing debt and lowers interest rate costs, thereby enhancing our financial flexibility to support the execution of our growth strategy.”