HALIFAX, NOVA SCOTIA–(Marketwired – May 12, 2016) –

NOT FOR DISTRIBUTION TO THE UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Killam Apartment REIT (“Killam”) (TSX:KMP.UN) is pleased to announce that it has reached an agreement with a syndicate of underwriters led by RBC Capital Markets to issue to the public, subject to regulatory approval, on a bought deal basis, 7,100,000 trust units (the “Units”) for $12.00 per Unit for gross proceeds of $85,200,000 (the “Offering”).

Killam has granted the Underwriters an over-allotment option for the purposes of covering the Underwriters’ over-allocation position for an additional 1,065,000 Units, exercisable up to 30 days after closing of the Offering.

Killam intends to use the net proceeds from the Offering to redeem its 5.65% convertible subordinated debentures (current outstanding balance of $57.5 million) which mature on November 30, 2017 and which have a par call date of December 1, 2015 (the “5.65% Debentures”) and to partially fund the previously announced apartment acquisitions in Halifax and Ottawa. Killam intends to use the remainder of the net proceeds, if any, to increase its portfolio of unencumbered assets, fund future property acquisitions and development activities and for general trust purposes.

Killam intends to provide formal notice of redemption to holders of the 5.65% Debentures following the closing of the Offering.

“We are pleased to have the opportunity to replace one of Killam’s two outstanding convertible debentures with equity”, noted Philip Fraser, Killam’s President and Chief Executive Officer. “We are targeting a reduction in Killam’s leverage during 2016 and the opportunity to redeem the 5.65% Debentures in the first half of the year is a key step in achieving this goal.”

Upon closing of the Offering (excluding the effect of the over-allotment option), the redemption of the 5.65% Debentures and the two recently announced acquisitions, Killam’s total debt to total assets ratio will decrease to approximately 53.2% from 55.8% at March 31, 2016.

Killam will, within the next few days, file with the securities commissions and other similar regulatory authorities in each of the provinces of Canada, excluding Quebec, a preliminary short form prospectus relating to the issuance of the Units. Closing of the Offering is expected to take place on or about June 2, 2016 and is subject to customary closing conditions, including the approval of the Toronto Stock Exchange.

This press release is not an offering of securities for sale in the United States. The Units being offered have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), and state securities laws. Accordingly, the Units may not be offered or sold in the United States absent registration or an exemption from the registration requirements of the U.S. Securities Act.

About Killam Apartment REIT

Killam Apartment REIT, based in Halifax, Nova Scotia, is one of Canada’s largest residential landlords, owning, operating and developing multi-family apartments and manufactured home communities. Killam’s current portfolio includes $1.85 billion in real estate assets. Killam’s strategy to maximize its value and long-term profitability includes concentrating on three key areas of growth: 1) increasing the earnings from its existing portfolio, 2) expanding its portfolio and diversifying geographically through accretive acquisitions, with an emphasis on newer properties, and 3) developing high-quality properties in its core markets.

Note: The Toronto Stock Exchange has neither approved nor disapproved of the information contained herein. Certain statements in this report may constitute forward-looking statements relating to the size and anticipated closing date of the Offering, the anticipated use of the net proceeds of the Offering and the impact of the Offering and the redemption of the 5.65% Debentures on Killam’s financial position, which are based on our expectations, estimates, forecast and projections, which we believe are reasonable as of the current date. Such forward-looking statements involve risks, uncertainties and other factors which may cause actual results, performance or achievements of Killam to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. For more exhaustive information on these risks and uncertainties, you should refer to our most recently filed annual information form which is available at www.sedar.com. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, a forward-looking statement speaks only as of the date on which such statement is made and should not be relied upon as of any other date. Other than as required by law, Killam does not undertake to update any of such forward-looking statements.

Killam Apartment REIT
Dale Noseworthy, CPA, CA, CFA
Vice President, Investor Relations and Corporate Planning
(902) 442-0388
[email protected]