Fairmont Hotels & Resorts Inc. (“FHR”) (TSX/NYSE: FHR) announced that it
has entered into agreements with initial purchasers to issue and sell $245
million of convertible senior notes (the “Notes”) due December 2023. FHR
has also granted the initial purchasers the option to purchase up to an
additional $25 million aggregate principal amount of notes exercisable
within 30 days from today. The Notes will bear interest of 3.75% per annum.
Upon occurrence of certain prescribed conditions, holders of the Notes
will have the right to convert them to common shares. FHR may call the
Notes in exchange for cash any time after January 20, 2009. Holders may
put the Notes to FHR in exchange for cash on January 20, 2009 and December
1, 2013 and 2018. The Notes will be convertible into shares of FHR`s
common stock at a conversion price of $37.73 per share, or 45% above the
$26.02 closing price of FHR`s common shares on the New York Stock Exchange
on December 2, 2003.
FHR intends to use the net proceeds of the offering to reduce borrowings
under its credit facility.
The 20-year Notes are only being offered to qualified institutional buyers
in accordance with Rule 144A under the U.S. Securities Act of 1933, as
amended (the “Securities Act”), and outside of the United States in
compliance with Regulation S under the Securities Act. The Notes have not
been and will not be registered under the Securities Act and may not be
offered or sold in the United States, or to or for the benefit of U.S.
persons, absent registration or an applicable exemption from registration
requirements. This press release is being issued in accordance with Rule
135c under the Securities Act. The Notes have not been qualified by a
prospectus filed in Canada, and are not being offered or sold to or for
the benefit of persons in Canada.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy these securities and shall not constitute
an offer, solicitation or sale in any jurisdiction in which such offer,
solicitation or sale would be unlawful.
About Fairmont Hotels & Resorts Inc.
FHR is one of North America`s leading owner/operators of luxury hotels and
resorts. FHR`s managed portfolio consists of 81 luxury and first-class
properties with more than 32,000 guestrooms in Canada, the United States,
Mexico, Bermuda, Barbados and the United Arab Emirates. It holds an 83.5%
controlling interest in Fairmont Hotels & Resorts (“Fairmont”), North
America`s largest luxury hotel management company, as measured by rooms
under management. Fairmont manages 42 distinctive city center and resort
hotels such as The Fairmont San Francisco, The Fairmont Banff Springs,
Fairmont Le Chateau Frontenac and The Fairmont Scottsdale Princess. FHR
also holds a 100% interest in Delta Hotels, Canada`s largest first-class
hotel management company, which manages and franchises a portfolio of 38
city center and resort properties in Canada. In addition to hotel
management, FHR holds real estate interests in 24 properties, two large
undeveloped land blocks and an approximate 35% investment interest in
Legacy Hotels Real Estate Investment Trust, which owns 24 properties.